ERP.com wraps up restructuring

By Nicola Mawson, Contributing journalist

Johannesburg, 05 Mar 2007

JSE-listed enterprise solution company ERP.com has completed its restructuring exercise and says prospects are positive.

ERP has disposed of non-core assets as it moves to become a "dominant provider of products and services that address information risk management". It says it has now completed this strategy.

The company on Friday reported its interim results to the end of January and said revenue was down 14%, to R61.8 million from R72 million a year ago. Pre-tax profit was 15% higher at R15.6 million, up from last year's figure of R13.49 million.

Bottom line impact

However, a loss from two discontinued operations - Customised Solutions and iServe - resulted in a R19.7 million loss, leading to a bottom line loss of R8.6 million. A year ago, the company reported a net profit of R9.57 million.

ERP says the loss was excluded from the calculation of earnings per share and headline earnings per share. A capital profit on the disposals, of R334 000, has been excluded from the calculation of headline earnings per share, it adds.

ERP's acquisition of Value Added Distribution (VAD) has been successfully integrated into the information security operation.

"VAD provides significant presence and capabilities in the firewall market, as well as additional distribution agencies which we will be able to leverage," the company said.

Brett Parker, previously VP of territory sales in Europe, Middle East and Africa for SAP, has been appointed MD of the security division.

Targeted growth

ERP says the second six months of the year should show improved performance, in line with tradition. "The board is confident that, in the longer-term, prospects for the group also remain positive. With the restructuring of the group completed, it has a clearly defined and well understood vision for the future," the company told shareholders.

It is implementing initiatives targeted at improving its presence in the rest of Africa and growing its services offerings. "We continue to identify new market segments within our strategic focus, which may be satisfied by attracting additional product agencies, providing additional services, or by making targeted acquisitions."

ERP says it is confident its focus on "an attractive segment within the IT industry" and its growth initiatives place it in a good position to grow going forward.

The firm's shares closed up on Friday at R1.50, 8c higher than Thursday's close. Its 12-month high is R2.05, while its 12-month low is R1.17.