Elexir Technology Holdings returned to profitability in the six months to 28 February as a result of a focus on its core business as an IT reseller.
However, the group has noted that its auditors have issued an adverse review opinion.
<B>Salient figures</B>
Operating profit: R823 000 (-R1.29m)
Profit before tax: R631 000 (-R1.4m)
Attributable profit: R631 000 (-R1.4m)
HEPS: 0.44c (-0.91c)
NAV per share: -4.59c (0.88c)
Current assets: R11.44m (R13.57m)
Current liabilities: R20.15m (R18.16m)
Cash flows from operating activities: -R4.87m (-R1.95m)
The company`s statements have been drawn up on the assumption that it will continue trading for the foreseeable future, that assets will be realised in the ordinary course of business and liabilities will be settled as and when they fall due.
"The directors have given serious consideration to their responsibilities to creditors and shareholders and are of the opinion that continued profitable trading enhances creditor claims over the assets of the company and it is, therefore, their obligation to continue trading under these circumstances," says CEO Brett Casey.
The auditors have drawn attention to the going concern disclosure and to the fact that Elexir remains technically insolvent.
"I would say we have been through the worst," Casey says. "The whole industry has been through a bad time."
He says the group is hoping to reverse its position of insolvency by the August year-ends. Casey says if it is not achieved by then, it should return to solvency by the next interim period.
He adds that the group has been streamlined significantly. "The real winner is Elexir Computer Services. We are back to where we were when we listed in 1998, so it`s really back to basics for us.
"We`ve also changed the way we do business and we are looking at getting a lot more recurring revenue. That has been a big drive of mine over the past 18 months.
"I believe we are going in the right direction. We just need to get away from the audit opinion. That will be first prize."
Casey says the financial improvement in the group will continue with increasing volumes of business from its alliances with small, medium and micro-enterprises, and the further development of opportunities within the telecommunications area and outsourcing of security management and bandwidth management.
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