Johannesburg, 16 Mar 2005
An improved second half of the financial year helped Idion partially offset a difficult first half, but it was not enough to stave off a small decline in headline earnings per share.
Revenue for the year to December period was down 5% from $32.8 million to $31.3 million. The first half of the year was marked by a slowdown of deal closure, in common with other software vendors in the US, and product transitioning issues at IBM.
Idion is the holding company for US-headquartered Vision Solutions, which operates in the high availability space and focuses on the IBM server environment.
Although IBM experienced a decline in IBM iSeries hardware revenue for the year, Vision CFO Tim Keithahn says the i5 server product transitioning issues were resolved in the fourth quarter.
Profit from operations rose from $89 000 to $573 000, while net pre-tax profit increased to $732 000, compared with $129 000 the previous year.
Idion financial director Willem Richard says that after revenue declined by 7% in the first half, in the second half the group had to align expenses with the lower revenues, although it continued to spend on research and development related to its flagship product, Orion.
However a higher tax charge ($1.5 million against a previous $682 000), resulted in a net loss of $771 000, compared with a $553 000 loss previously. Headline earnings per share slipped from 1.4 US cents to 1.3c, while a basic loss of 0.7c per share compares with a previous loss of 0.5c a share.
Richard says the higher tax charge resulted from the reversal of a deferred tax asset on assessed losses attributable to the South African operations which were sold some years ago.
Keithahn says the only way the group could have realised the benefit of the deferred tax asset would have been to have operations in SA. It was decided rather to reverse the asset.
"The first six months were challenging," says CEO Nicolaas Vlok. "Then [hostile shareholder] DataMirror left and we built momentum, with a good fourth quarter. We expect that momentum to continue."
The group has taken steps to overcome the softness in revenue, including restructuring its sales operations and acquiring UK-based OS Solutions, which will, among other things, counter pricing pressures due to small and medium business competitors. However, the acquisition will carry some integration costs.
The group has also announced Richard`s resignation and his replacement with Keithahn, in line with its intention to focus on offshore expansion.
Share