UCS Group has reported a 21.4% increase in headline earnings per share (HEPS) for the year to September.
CEO John Bright says the quality of the increase in HEPS, from 9.8c to 11.9c, is highlighted by a 45.2% growth in cash generated from operations, from R41.48 million to R60.21 million.
Revenue rose by 58.8% from R306.22 million to R486.29 million, with annuity revenues up 60% to R280 million.
"Due to delays in certain large customer projects, organic growth was limited to only 3%, with the balance - 56% - of the growth attributable to current and prior-year acquisitions," Bright says.
He says although it was forecast that the challenging IT market conditions of the past four years would improve this year, there was little evidence of this.
"It is also significant to note that while the South African retail sector, the group`s primary target market, is currently extremely buoyant and experiencing phenomenal growth, the 'boom` is taking place in what can be generally described as a deflationary environment.
"Under these circumstances, many retailers have concentrated more on cost containment than on technology-driven business improvements based on new IT investments."
Profit before tax rose by 14.6% from R23.91 million to R27.4 million and the group achieved net profit of R24.63 million, up 28.1% from the R19.23 million of the previous year. A final dividend of 2.3c a share has been declared.
On the balance sheet, current assets of R137.8 million compare with current liabilities of R95.93 million, representing a current ratio of 1.44:1. Bright says the ratio is still below the group`s minimum policy target of 1.5:1 and will continue to receive attention in the year ahead.
The balance sheet shows a drop in loans owing from R28 million to R5 million, the result of repayments of short-term debt from the Affinity Logic acquisition.
Bright says management has adopted a conservative view for prospects in the 2004/05 financial year, although current order books indicate that the group should produce acceptable growth for the full year.
A challenging start to the new financial year is expected, with a stronger performance in the second half.
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