Johannesburg, 13 Sep 2002
Software provider Global Technology has reported an 87.8% decline in its interim headline earnings per share, which it attributes partly to lower associate income from Swiss-listed Temenos and foreign exchange losses.
Glotec owns 15% of Temenos.
Chairman Ray Leonard says the foreign exchange losses resulted from the recovery of the local currency in the first quarter of the year.
The drop in earnings is despite a strong improvement in revenue and operating profit.
Prospects for the next six months, however, are promising, Leonard says.
"Global Technology expects a continued improvement in operating profit and Temenos has indicated that it is expecting improved results in the second half of the financial year.
"In terms of new business, the group has a significant, well-managed pipeline and we anticipate a number of new business opportunities arising through our African and Australasian subsidiaries.
"Global Technology will continue to place strong emphasis on product development and services, focusing particularly on distributing its locally developed products globally."
In the long-term, the group is not expecting the foreign exchange losses to be repeated and anticipates lower interest costs. Higher interest costs were also cited as having a negative effect on interim earnings.
Leonard says the group has continued to maintain a high level of dollar-denominated revenue, which now comprises 74% of its earnings.
During the six months Glotec disposed of non-core businesses Fin-X and Bankplus, although both will continue their alliance with the group.
It also expanded its geographical reach by concluding deals with banks in Ethiopia, Uganda and Papua New Guinea.
The Glotec share was trading at 22c on the JSE this morning, down 4c or 15.4% from yesterday`s close.
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