Software provider IFCA Technologies just missed its predicted revenue for the 10 months to end-December, but posted higher than expected profit after tax.
IFCA listed on JSE's Alternative Exchange (AltX) in December and stated in its pre-listing prospectus that it aimed to bring in R16.1 million in revenue and R13.1 million in gross profit at the end of 2006. Revenue came in at R14.75 million, while gross profit came in at R9.97 million.
FD Chris Boshoff explains the missed revenue target was as a result of delayed pick up of its new line, which was launched in the second quarter of last year, by its Malaysian partners. However, as the new line is hardware-oriented, it will bring in lower margins, which is why this missed revenue was not seen in the net profit line.
The company saw its first trade on listing last year at 57c, but was trading at 50c by 12.30, 1.96% down on the day. Its 12-month high is 59c and its 12-month low is 49c.
The company reported net profit of R3.67 million, beating its prospectus target of R3.57 million. To the end of 2007, the company expects to pull in revenue of R34.2 million and gross profit of R23 million, with net profit of R5.8 million. By the end of 2008, the company expects to be earning R48.6 million, with a gross profit of R27.9 million.
Income growth
<B>Fast figures:</B>
IFCA 12-month figures to end-2006
Previous 12 months in brackets
Revenue: R14.75m (R12.18m)
Pre-tax profit: R4.8m (R2.58m)
Net profit: R3.69m (R2.39m)
EPS: 4.04 (2.65)
HEPS: 4.04 (2.66)
Cash-on-hand: R4.7m (R2.5m)
Current assets: R10.7m
Current liabilities: R3m
Current ratio: 3.57
CEO BK Wong attributes the strong performance to increased business with existing and new customers, resulting in an overall growth in income. "We have actively developed software solutions and services, reinforcing our market dominance by either renewing our existing customer contracts or signing on new ones."
Boshoff says the results are not completely directly comparable with the previous results, as IFCA moved its year-end to December to fall in line with its Malaysian parent company.
IFCA is an investment holding company and has two main subsidiaries. IFCA sWare focuses on the group's software solutions and services, and IFCA hWare, which was incorporated on 25 October, focuses on the firm's computerised business equipment solutions.
Expanding
Looking ahead, Boshoff says the company will invest R4.7 million cash-on-hand in two new offices, one in Durban and the other in Cape Town. This should aid in trimming costs as the company is running two installations in Cape Town from the Johannesburg branch, which has pushed up staff costs. In addition, the new offices will extend its reach and bring in more business, he says.
The company also paid off a loan, but kept the debt financing option open. Post year-end, it sold an office property in Houghton for R1.15 million, as it was too small. It has subsequently purchased space in Woodmead for R3.125 million.
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