AST Group reduced its net loss and also achieved headline profitability in the six months to December.
CEO John Miller says the group continued to make good progress on consolidating the benefits resulting from its restructuring exercise, dubbed AST`s "business improvement programme", despite continued tough market conditions.
"We have dealt with our difficult historical problems and look forward to operating as a revitalised business," he adds.
Revenue for the period slipped by 15.7% to R747.06 million, from R886.04 million for the same six months of 2003. Miller says the decline is the result of continued cost pressure from the existing client base and the competitive market environment.
An R83.1 million impairment of assets resulted in an operating loss of R43.61 million (2003: R10.18 million loss) before amortisation. Miller says the impairment charge relates to the impairment of a deferred tax asset and follows an agreement reached to settle historical uncertainties with the South African Revenue Service (SARS).
The group has also reversed interest provisions of R17.7 million created in 2004 which, after the agreement with SARS, proved to be excessive. The reversal helped the group reduce its net loss to R80.48 million, from R95.08 million previously.
While the group reported a basic loss of 41.5c (62.11c loss) per share, headline earnings moved from a negative 13.23c a share to a positive 11.3c a share.
On the balance sheet, the current ratio improved from 0.89 to 0.95 and the interest-bearing debt to equity ratio improved from 11.1 times at 30 June to 3.3 times at 31 December.
Cash generated from operations rose to R38 million, compared with R10.8 million for the year-earlier period.
Miller says while market conditions are expected to remain difficult in the second half, the group is positioned to be better able to deal with them.
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