DataPro ups earnings

By Nicola Mawson for DataPro

Johannesburg, 06 Dec 2006

JSE-listed telecommunications group DataPro has told shareholders that its earnings will move up after the Orion deal.

In November, DataPro announced its intention to acquire Orion Telecom in a R380 million deal that it said would significantly increase the scale, strategic position and market share of the combined group.

While its pro forma financial effects are illustrative only, and may not be a true reflection of its financial position, earnings per share are expected to move up 128%.

Executive chairman Tony van Marken explains the illustrative figures show what the combined performance of the new entity would look like based on both firms' financial figures for the second half of the year. As Definity was acquired mid-year, the figures only take into account two months worth of this company's earnings.

Definity Telecom was acquired in July for R70 million to accelerate the growth of VoxTelecom's voice business.

These figures, based on its latest full-year results, shows earnings per share up to 5.13c a share. Headline earnings per share are expected to move up by 139.34% to 5.05c a share.

The company's net asset value is expected to increase by 40.12%, to 55.178c a share, from 39.81c a share. However, its tangible net asset value will move to a negative position, DataPro states.

While the split between cash and shares to make up the purchase price of R380 million is yet to be decided, the company has already indicated Orion will have a positive impact on its bottom line.

In November, DataPro published its annual results to end-August and said revenue had gone up 103%, to R196 million, while net profit after tax moved up 227%, to R12.9 million.

At the time, Van Marken said - while the company has stretched targets for the future - looking at annualised revenue off the back of the Orion takeover, the group should hit R1 billion.