Square One Solutions has reported a 161% increase in full-year headline earnings per share (HEPS).
The HEPS figure of 9.4c is not only an improvement on the 3.6c in the 2004 financial year, when the company experienced a downturn, but is also better than the HEPS of 7.8c in 2003.
Square One's earnings decline in 2004 was attributed to acquisition-related costs.
The JSE-listed company provides solutions for, among others, document and information sharing, Internet technology, e-commerce, data storage, biometric IT solutions and uninterruptible power supplies.
Turnover for the period rose 41.8% to R204.65 million (2004: R144.34 million), while operating profit before goodwill impairment was up 134.4% at R6.5 million (R2.77 million).
Pre-tax profit amounted to R2.43 million (R81 000), but a R1.19 million tax benefit helped the company to a net attributable profit of R1.25 million (R556 000), translating to earnings of 5.3c (2.5c) per share.
CEO Trevor James says cross-selling opportunities, combined with an increased demand for the group's offerings in the telecoms sector, buoyed sales.
Growth curve
As a result of the increased sales, inventories recorded on the balance sheet rose to R18.4 million (R16.78 million). Current assets, of which bank balances amounted to R5.68 million (R1.81 million), totalled R66.61 million (R47.17 million) against current liabilities of R53.96 million (R34.88 million).
Accounts receivable rose sharply, from R28.58 million to R42.53 million, which James says is also associated with the increase in sales.
He adds that "the prophecy of the ultimate 'global village'" is close to fulfilment, mainly the result of the worldwide acceptance of Internet Protocol (IP) as the de facto standard for connectivity.
The convergence of three industries - telco/Internet service provider, cellular, and media and entertainment - is gathering momentum, he says.
"The blurring of the lines between these three industries is starting to create exciting market opportunities and the promise of exciting new services in the offing."
Square One, James adds, anticipated the deregulation of the telecoms market almost three years ago and is in a good position to capitalise on the deregulated environment.
Says chief operating officer Craig Alexander: "We are committed to ensuring the growth curve continues through 2006 from a market share and profitability viewpoint.
"We have entered into several significant strategic partnerships that empower us to provide local business with high efficiency IP solutions spanning vital areas such as voice and data convergence and next-generation IP services."
The Square One share closed untraded at 70c yesterday.
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