DTH reports lower earnings

Revenue grew 19.6% during the year, but earnings dropped 21.2%, says JSE-listed Dynamic Technology Holdings (DTH).

The company yesterday released its year-end results, and said revenue was up to R85 million, but net profit was lower than a year before, at R6.9 million, as its margins were placed under pressure.

DTH is a group of businesses specialising in application software. The group's core focus is providing tailor-made solutions using a blend of existing and custom-built software and components.

The company explains that operating margins from continuing operations dropped to 11.4%, from 13.9%, because of tough market conditions that saw clients place pressure on costs. In addition, it felt staff cost pressures, because of “the acute skills shortage in the industry”.

Digital and Radical. “Both businesses formed part of the product segment of the group, and were marginal in terms of contribution to group profit,” says DTH.

The units were too small and specialised to be considered core to the company's business, it says. “Their disposals have enabled management to focus their attention on the group's core activity, being software development and services.”

It also discontinued the services business of The Talent Exchange, housed within Dynamic Visual Technologies, to trim further losses. “The demand for IT recruitment services was severely affected by the downturn in the economy and the recovery of this business activity could not be foreseen in the short- to medium-term,” DTH says.

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