JSE AltX-listed Dynamic Technology Holdings (DTH), formerly known as DVT Holdings, has reported strong revenue and profit for the six-month period ended 31 August 2008.
Revenue increased by 28.7% to R36.4 million, as against revenue of R28.3 million for the comparable period in 2007. Operating profit increased by 28.8% to R5.1 million, compared with R3.98 million in the six-month period ended 31 August 2007.
Headline earnings per share were up 11.7%, from 7.3 cents per share for the same period last year to 8.1 cents. Assets increased by 69.7% to R36.9 million, while net tangible asset value per share was up 177.4%.
The group is ungeared, carries no long-term debt and has high levels of liquidity.
"We are pleased to be able to report results like these in such a difficult market," says DTH CEO Chris Wilkins. "Our market is characterised by two complementary pressures: margins on customer contracts are dropping as budgets are being reviewed; and the skills shortage, which is becoming increasingly severe, and means we have to pay higher rates for the same skills. This places the emphasis on containing our fixed costs, which we have done well enough to maintain our operating margin of 14.1% relative to last year."
In the period under review, DTH acquired a majority shareholding in Emerald Consulting, a company active in the legal fraternity, where it has as long-term customers many of South Africa's leading legal service providers.
"Emerald has brought good earnings and complementary skills and expansion opportunities to the DTH group," says Wilkins. "Our strategy of organic and acquisitive growth is bearing fruit."
The group's prospects remain positive, Wilkins reports. "There will continue to be slow downward pressure on billable rates, with no increase in the number of large, new projects starting up in 2009. This is understandable given market conditions. However, the group is well positioned operationally and strategically, to deliver strong organic growth and we are confident of meeting revenue and earnings targets for the year ending February 2009 as stated in our prospectus."
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