Internet service provider DataPro has declared a maiden dividend on the release of its first set of financial results as a listed company.
The group, which achieved earnings and headline earnings of 2c a share for the six months to end-February, is to pay shareholders 1c a share on 23 May.
Revenue came in at just short of R50 million, while earnings before interest, tax, depreciation and amortisation amounted to R7.86 million. A net profit of R4.55 million was achieved.
On the balance sheet, current assets of R10.5 million (including cash of R3.68 million) compare with current liabilities of R19.69 million. A net cash outflow of R7.08 million from operating activities was recorded.
"Revenue and profits were not as high as projected, due primarily to the announcement in September 2004 by government of intended deregulation in the telecommunications industry," says CEO Doug Reed.
"Although this caused a significant drop in revenue from DataPro`s voice model, based on callback and cellular least-cost routing, the deregulation has opened up the market to VOIP (voice over Internet Protocol) and the board of directors resolved to make a significant investment in the future growth opportunities.
"As a result, the company has incurred significant costs in gearing up for VOIP business, by increasing the sales force by 100% and the technical and administrative support departments by 54%."
He says this resulted in a 42% increase in the salary expense, while the establishment of a reseller channel and increased marketing expenditure accounted for another R880 000.
"The total effect on earnings from increased salaries and related costs, including marketing, amounted to approximately R4.6 million," Reed says. "This investment in growth is estimated to have impacted earnings by approximately 2c per share during the six-month period."
Voice business Vox Telecom, still in its infancy, is expected to contribute significantly to revenue and profit in the foreseeable future, Reed says. "It is anticipated that VOIP, through Vox Telecom, will ultimately overtake the data business in the next year."
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