AltX-listed ISA Holdings Limited today reported yet another strong set of annual results, for their year ended 28 February 2006. Amongst the highlights, earnings increased a phenomenal 134% and headline earnings grew by 72%, in comparison to last years reported figures.
International Financial Reporting Standards (IFRS) was applied for the first time, culminating in last years figures being restated from earnings of R3.2 million to R5 million. When comparing earnings and headline earnings on this basis, their increases were 49% and 54% respectively.
Clifford Katz, CEO of ISA, says that there has been a general upswing in spending in the information security market due to the positive momentum in corporate governance and related legislative frameworks. "ISA's ability to convert these opportunities into tangible and distributable profits, illustrates the value of a sustainable strategy, which has been successfully implemented by a team of focused and experienced specialists," he says.
An increase in cash of R7 million represents a commendable 93% of earnings, allowing ISA to close the financial year with cash on hand totalling R11.9 million. The directors believe that ISA should be able to sustain its organic growth objectives with little impact to its capital structures. In this light and in support of the directors' opinion that surplus cash should be distributed to shareholders, the board has declared an ordinary dividend of 4 cents per share.
The results included an increase in revenue of 21% to R38 million and highlighted that the quality of this revenue further improved during the period with annuity derived sales of 58%, from 50% in 2005. This spread is in line with previously stated objectives and sets a solid foundation for sustainable growth into the future.
To capitalise on the opportunities in the greater sub-Saharan African region, ISA continued their focused business development initiative to increase its income from outside of South Africa. The success of this initiative has resulted in a revenue contribution of 12% for the period. Going forward, ISA remains cautiously optimistic about their prospects in this region and anticipates increased spending on information security, specifically in Nigeria, Kenya and Botswana.
"We are pleased with ISA's performance and the directors are proud to announce that all of its key performance indicators were achieved. Going into the new financial year with a streamlined service model, underpinned by a recently implemented Customer Relationship Management system, ISA is able to achieve a level of agility and responsiveness, which are fundamental ingredients to the delivery of world-class proactive security solutions." concludes Katz
The company is well positioned to further capitalise on opportunities within their market. They intend to continue achieving above average organic growth, by further developing their coverage and competencies within the information security sector.
ISA is actively pursuing a BEE partnership and expects that the cautionary announcement dated 4 May 2006, relating to an anticipated empowerment deal, will culminate in the success of this objective.
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