Faritec Holdings is expected to release a cautionary notice within three weeks relating to talks which could see a black empowerment partner acquire 30% of the group.
<B>Salient figures</B>
Faritec Holdings results for the year to 30 June 2002
Previous year`s figures in parentheses, move in square brackets:
Revenue: R304.4m (R273.72m) [+11%]
Profit from operations: R19.23m (R12.73m) [+51%]
Profit before tax: R22.16m (R12.73m) [+44%]
Attributable earnings: R17.46m (R12.69m) [+38%]
Headline earnings: R17.51m (R12.78m) [+37%]
HEPS: 13c (9c) [+44%]
Current assets: R154.68m (R151.73m)
Cash and equivalents: R82.94m (R76.93m)
Current liabilities: R84.98m (R84.6m)
NAV per share: 68.8c (58.2c)
Cash flow from operating activities: R22.93m (R16.81m)
Faritec, which this morning reported a 51% increase in profit from operations for the year to 30 June, also announced a new structure which will see its three business divisions become autonomous entities operating under the holding company.
Commenting on the results, CEO Simon Tomlinson says the improvement in the operating margin, from 4.6% to 6.3%, is the result of a continued focus on the core business and tight management of operating expenses.
The lion`s share of the 11% turnover growth is from e-bis, Faritec`s value-added distribution joint venture, which performed above expectations and continues to grow its market in Africa.
Tomlinson says the decision to restructure the group was taken in the interests of positioning it for future growth. The three companies, Faritec Enterprise Solutions, Faritec ICP and Faritec Strategic IT Services, will operate independently of each other under the holding group.
"The company was ready for change and although we expect the tough economic conditions to continue for the rest of the year, the management team agreed that it was more important to take advantage of the internal readiness and prepare the business for an economic upturn than hold off until a more positive environment comes about."
He says the group is committed to black economic empowerment and has been in talks involving potential partners.
Faritec narrowed the field to four potential partners, but talks with one failed as it was unable to raise funds.
However, Tomlinson says he expects to have to issue a cautionary notice in the next three weeks with regard to talks with another candidate. The aim is to have the partner acquire a 30% stake in Faritec at group level.
The Faritec share was trading at 83c on the JSE late this morning, up 8c or 10.7% from yesterday`s close.
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