Specialist automotive electronics firm Control Instruments (CI) says it has weathered the fallout generated by the bankruptcy of UK car manufacturer, MG Rover, although ongoing business has been lost.
Reporting its six-month results for the period ended 30 June, CI says revenue fell by 12.8% to R175.959 million compared to the same period last year. Operating profit dropped by 16.3% to R18.508 million and profit before tax tumbled 19.2% to R15.792 million.
However, CI says that despite the loss of revenue, it is attaining higher margins for its products, allowing overall gross profit to remain at R84 million.
The company says profitability was impacted by the timing of vehicle model phase-outs and phase-ins. Expenses also increased as part of a programme to establish a strong foundation for the high levels of growth expected from 2006 onwards.
While provisions were in place to cover the risk of the collapse of MG Rover in the UK, CI says it has lost ongoing business.
The company says the business of Autocom, acquired at the beginning of this year, will be fully integrated by the second half of the year.
Prospects for the next six months should result in continued growth, it says, although at a slower pace than previously. However, it expects things to improve in the 2006 financial year.
The company says it continues to look for acquisitions to complement its African distribution and offshore operations. It is in negotiations to complete a significant acquisition and so the cautionary announcement was renewed today.
CI reported headline earnings of R14.615 million, up 3.9% compared to the previous year. This translates into headline earnings per share of 22c, up 5.1c from the 2004 half-year results.
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