Interconnective Solutions` share gained 3c or 25% to close at 15c on the JSE on Friday evening after the group released annual results showing that it has returned to profitability.
Interconnective`s wholly owned subsidiary, FoneWorx, is a telecommunications value-added service provider, providing infotainment and business services.
The group`s net profit of R1.04 million for the year to June compares with a loss of R1.35 million for the previous year.
Revenue rose from R22.15 million to R30.53 million and a profit of R1.06 million from operations compares with a loss of R1.36 million previously.
Basic earnings and headline earnings per share amounted to 0.93c and 1.22c respectively, reversing the previous basic loss of 1.21c a share and headline loss of 0.93c a share.
CEO Mark Smith says the group is debt free, except for short-term finance for capital equipment, which amounts to R583 000 in aggregate.
The group had cash of R3.15 million at the end of the period, compared with R1.33 million a year before.
Smith says FoneWorx hosted various interactive campaigns during the year, including the Telkom Charity Cup, Test The Nation, MTV Music Awards and more than 300 campaigns for fast-moving consumer brands.
He adds that there is unreasonable margin squeeze in the infotainment area due to the cellular networks appointing too many service providers, many of which do not have the infrastructure to provide comprehensive services but undercut on price.
Also putting pressure on margins is the fact that certain cellular networks also compete with their service providers instead of co-operating with them.
Smith says FoneWorx Fax2Email has shown "incredible" growth. The group was also recently awarded a value-added network services (VANS) licence, allowing for the carriage of voice and data, and also allows the group to interconnect to the networks and apply for its own numbering range.
"The deployment of our VPN (virtual private network) - coupled with the fact that our platform is connected to all GSM (global systems for mobile communications) networks as well as the PSTN (public service telephone network) - and our recently acquired VANS licence will provide FoneWorx with exciting new products and services within the VOIP (voice over Internet Protocol) arena," he adds.
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