Challenging period for Infowave

IT service provider Infowave Holdings has reported a marginal increase in turnover for the six months to 31 August, which executive chairman Ralph Collis attributes to tough trading conditions.

Although turnover rose by just 3% to R15.92 million, operating profit was 20% higher than for the year-earlier period. However, this was offset by an increase in the effective tax rate from 23.7% to 38.8%.

"This is due to the recognition of deferred taxation as well as the payment of secondary taxation on companies (STC) on the dividend paid to shareholders on 23 June 2003," Collis says.

"We have undertaken the development of two niche products during the period. While it is early in the lifecycle of taking these to market, a keen interest has been shown and we have won new business with both of these products.

"We continue to research future core technologies, which underpin our strategic technology decisions for both existing customers and new product development."

At the end of the period Infowave had black shareholding of 24%. "Infowave is in the early stages of identifying an appropriate black economic empowerment partner," Collis says. "We are currently looking at all areas for opportunity to improve our empowerment."

He says the group continues to face challenging trading conditions, which, together with the full tax charge and STC, means the outlook to 28 February 2004 is less favourable than expected.

"We persistently focus on operational efficiency while ensuring we do not prejudice investment for future growth."