UCS`s profit soars

By Staff Writer for UCS Group
Johannesburg, 16 May 2006

Software and outsourcing company UCS Group has reported a 70.7% increase in profit to R21.07 million for the six months to end-March, from R12.54 million for the same period a year earlier.

This was on a 43% increase in revenue from R249.06 million to R355.6 million, which includes the contribution of the CEB Maintenance acquisition, effective from 1 October last year. The R48 million acquisition, made through a subsidiary, was announced in July last year.

The board has declared an interim dividend of 3c a share, to be paid on 7 August.

"The results show good top-line growth, together with modest margin improvements across the group, reflecting the initial benefits of our continuing 'drive for efficiency` programme," says UCS Group CEO John Bright.

Headline earnings per share grew 52% to 8.2c from 5.4c previously, while basic earnings per share rose 64% from 5.3c to 8.7c.

Bright says CEB Maintenance delivered outstanding results.

Cash generated from operations grew 52% to R50.3 million from R33 million previously.

The balance sheet records cash of R35.6 million at the end of the period, compared with R31.83 million a year before. Current assets of R172.58 million compare with current liabilities of R141.15 million. This compares with current assets of R122.48 million and current liabilities of R83.36 million previously.

Bright warns that UCS Group`s earnings growth may be comparatively slower in the second half of the 2006 financial year, due to the strong performance in last year`s second half.

Last week, UCS bought 100% of Quadrant Consulting Group and 60% of TSS Managed Services from black economic empowerment company Tactical Software Systems, for a combined price tag of about R58 million.

UCS`s shares were trading at 209c late this morning, up 4c or almost 2% from yesterday`s close.