Idion Technology Holdings has reported interim headline earnings of 0.5c a share on continuing operations. It says the figure would have been 2.3c had it not had to fend off a takeover bid.
However, an 8.8c headline loss per share at Idion Solutions, disposed of with effect from 1 September, resulted in an overall headline loss of 8.3c per share.
<B>Salient figures</B>
Idion Technology Holdings results for the six months to 30 June 2002
Year-earlier period in parentheses
Continuing operations:
Revenue: R138.8m (R85.89m)
Gross profit: R111.3m (R66.5m)
Operating profit before amortisation: R4m (-R26.4m)
Amortisation: R28m (R38.6m)
Net loss (continuing operations): R21.48m (R48.45m)
HEPS: 0.5c (-14.9c)
Discontinued operations:
Revenue: R7.04m (R9.04m)
Gross profit: -R2.53m (R7.66m)
Operating profit before amortisation: -R14.09m (-R8.05m)
Amortisation: -- (R464 000)
Net loss (discontinued operations): R9.86m (R5.63m)
HEPS: -8.8c (-4.6c)
Total:
Net loss: R31.34m (R54.08m)
Current assets: R126.06m (R154.96m)
Cash and equivalents: R48.76m (R43.36m)
Current liabilities: R152.64m (R179.32m)
NAV per share: 149.6c (206.2c)
NTAV per share: 31.7c (36.8c)
Cash generated from operations: R17.16m (R6.7m)
Non-recurring expenses of R2.5 million were incurred in the six months to June to defend the group against the hostile bid by Canada`s DataMirror Corporation, and Idion CEO Nicolaas Vlok says a further R2.5 million in related costs will be reported in the second half.
Financial director Willem Richard says these costs do not take into account delayed business as a result of the negative publicity surrounding the bid.
Notwithstanding the bid and tough economic conditions, Vision Solutions - the group`s US subsidiary and only operating entity following the recent sale of the South African-based Idion Solutions - achieved a turnaround.
Vision increased revenue in all its lines of business - licences, maintenance and services - and was strongly cash generative.
Vision CFO Tim Keithahn says the company is expecting to continue to generate cash in the second half of the year. Vision is a seasonal operation and the bulk of sales and profits traditionally come in the second half.
He says Vision resized in January, reducing staff and cutting costs, particularly in sales and marketing.
"Across the board, the profitable IT companies are the ones that are realigning costs. We reaped the dividends of that a bit earlier than we expected."
Keithahn says he is hopeful of some economic recovery in the second half, although the company has not planned for it.
The long-term outlook appears positive, with increased market awareness of managed availability solutions after the 11 September terrorist attacks in the US. "High availability is seen as essential, even though people are holding back on overall IT spending.
"As far as the second half is concerned, we are not patting each other on the back saying it`s a great job and relaxing. We are still focused on cost containment and cash flow management."
Vlok says the group is committed to achieving headline profitability on a full-year basis as forecast.
Idion Solutions, which has been sold to CS Holdings for between R6 million and R9 million, depending on the company`s performance, reported a worse loss than in the year-earlier period.
Richard says the group is expected to report a loss of R11.7 million to R14.7 million on the disposal as it was sold at less than its net asset value. A further limited operational loss will be incurred to 1 September, when the disposal takes effect.
"You can see from the price that the sale was not made to raise cash, as a minority shareholder and some market commentators suggested," Keithahn says. Richard says the R48 million cash position is the most cash Idion has had on its balance sheet.
The Idion share was trading at 80c on the JSE this morning, down 5c or 5.88% from yesterday`s close.
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