DataPro Group, the AltX-listed group of telecommunication companies, has announced its results for the six months ended February 2006.
Revenue grew R28.7 million (57%) over the comparative period. Operating profit increased by 79.6% to R6.4 million and profit before taxation increased by 153% over the prior period. Net profit after taxation reflected an increase of R2 million (78%) over the prior period, to R4.6 million with headline earnings increasing by 32% to R3.5 million.
While headline earnings per share remained constant at 1.2c, earnings per share reflected an increase of 36% to 1.5c per share.
The results are in line with the director`s expectations as the company has taken a longer term view and invested in the business.
Douglas Reed, CEO of DataPro Group, said: "We now have a platform to build an integrated telecommunications company that can effectively compete in this sector.
"DataPro remains a traditional Internet service provider (ISP) and our annuity business is growing steadily. Here our monthly contracted revenue increased by 22% (net of deflation), which represents strong performance in revenue growth."
Commenting on the company`s broadband strategy, Reed added: "We have been aggressively pursuing this market and our results reflect the positive contribution this has had with increased sales, lower input costs, usage-based billing and additional products, which increased the gross margin percentage. ADSL is currently growing at around 12% per month, and DataPro is quickly gaining market share."
In VoxTelecom, voice revenue increased to R5.7 million, an 89% increase over the prior period. Margins also increased from 16.3% to 19.9% but start-up costs continued to have an impact on the results for the period, although less so than the prior period and going forward the monthly losses have been stemmed.
The acquisition of Atlantic Internet Services (Proprietary) Limited on 31 August 2005 has given DataPro Group a large telecommunication footprint in the consumer market, which is a new area of business for the group.
"Within @lantic we have a unique distribution platform via 150 regional franchisees with over 600 small IT firms and retailers in their regions. The business has been successfully integrated into the group and the subscriber base has grown from 34 000 to 38 000 as at 28 February 2006."
Atlantic`s revenue in this period increased by 30% to the corresponding period. Gross margins increased by approximately 5% due to synergies with DataPro.
He added: "ISP, ADSL and @tlantic will continue to be a key focus for growth. Upgrades off an ever-increasing base provided 50% of current ISP growth within DataPro. The ADSL sector is experiencing unprecedented growth and DataPro is a leading player in this market. We are aligning the @lantic franchise channel to ensure franchisees continue to be successful through branding, incentivisation and by increasing the range of services to consumers."
VoxTelecom is expected to start contributing more significantly to revenue and profit in the foreseeable future, with VOIP technical problems, in the main, having been resolved and the interconnects in progress.
"We are very positive about the future," said Reed. "The DataPro Group has established a platform to build a significant telecommunications business offering a broad range of services. Convergence of technologies and deregulation has increased the size of the market, signifying the strategic importance of the voice strategy. "
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