CS Holdings has reported headline earnings of 1.25c a share for the six months to 31 December, compared with a loss of 0.09c a share for the year-earlier period.
Revenue increased by 15.3% from R222.03 million to R255.92 million while the operating profit before depreciation jumped by 137.7% from R8.86 million to R21.05 million.
CEO Annette van der Laan says an exceptional item of R7.93 million on the income statement relates to the costs of a restructuring and rationalisation programme that should be concluded in the second half of the financial year.
"It was a pain that we had to take," she says. "But in retrospect this was a pretty short time to effect these changes and show an improvement, so we are very pleased with what we have achieved. We just need to keep the improvement going."
A pre-tax loss of R3.01 million compares with a previous loss of R6.99 million, while an attributable loss of R3.42 million compares with a loss of R6.97 million in the year-earlier period.
CS Holdings incurred a basic loss per share of 1.39c, compared with a 3.09c loss previously.
Van der Laan says the cost reduction activity is bearing fruit at the people division, which has returned to a net operating profit margin of 6%. The process division`s focus has been mainly on projects and consultants with a drive to convert employees into contractors. A net operating profit margin of 8% at the division compares with a loss previously.
The IT solutions division focused on the integration of First National Bank`s IT customer services division as well as the rationalisation process.
"Traditionally, the group`s financial results are lower in the first half of the financial year," says Van der Laan. "The board anticipates that the financial results for the second half of the financial year will exceed those achieved in the first half."
She says almost all outstanding vendor payments have been repaid and the strong cash generation is being used to reduce the overdraft.
The CS Holdings share was trading at 71c at noon today, down 2c from yesterday`s close.
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