FoneWorx grows earnings

Investment holding company FoneWorx has grown earnings in the year to June, despite the dilution effects of an empowerment deal.

The company provides interactive telecommunication, switching and business services, oriented around fixed and mobile networks, through its subsidiaries. It has hosted promotions, competitions and voting services for events such as Idols, Telkom Charity Cup, Big Brother Africa, African Cup of Nations and Strictly Come Dancing.

CEO Mark Smith says most of the growth in the coming year will be organic, but management will continue to look at acquisitive opportunities to add to its existing divisions.

“The group has a strong balance sheet, with enhanced cash flows, which will assist us in our future growth,” he says.

During the year, revenue grew from R71 million to R79 million, while earnings before net interest, tax, depreciation and amortisation improved 23.8%, to R24.4 million from R19.7 million.

However, its empowerment deal with Kabo Capital took place eight days before the end of the year, which resulted in shareholding being diluted, and impacting headline and earnings per share.

Earnings per share grew 4.2%, to 13.54c, and headline earnings per share increased to 13.53c, a growth of 5.9%. Profit before tax increased 28%, to R25.5 million, while gross profit improved 22.6%, to R47.7 million. Net profit for the year improved to R18.2 million, which is an increase of 22.1%.

FoneWorx declared a dividend of 4c a share, up from last year's 2.72c a share.

Smith says he is “confident about the outlook for the ensuing year to June 2010 and in particular very excited about our prospects with our Identity Verification Services, CarbonWorx and Disaster Recovery Services, which will create new revenue streams for the group”.

He adds that the company has launched a training academy, developed a 25-seat, fully equipped training room, and started training Commissioners of Oaths for its Identity Verification Services unit.

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