Despite an erosion in its revenue - from R47 million to R41 million - in the first half of the year, ISA Holdings improved its bottom line, and is optimistic about its long-term prospects.
In the six months to August, ISA's net profit gained from R7.4 million to R7.5 million in a period the group says was characterised by "challenging trading conditions" and "continued pressure on the local economy". It said, in a statement to shareholders, overall performance "remains satisfactory".
ISA is "optimistic" about its long-term prospects, "as the key drivers of the IT security market remain robust".
It notes: "With the continued evolution and persistence of threats and attacks against corporate information and IT resources, together with the increased regulatory and legislative compliance requirements, stakeholders continue to elevate the importance of IT security within their organisations.
"By leveraging this positive sentiment towards the information security market, as well as our positioning as a thought leader in this market segment, our stakeholders are likely to benefit from above average tangible returns over time."
Large deals slowed
The company says the decline in revenue was mostly due to a slowdown in what it calls new solution sales, or large deals. It explains, because timing of these deals is "somewhat unpredictable, the isolated comparison of top line performance from one reporting period to the next tends to be erratic".
ISA was encouraged by growth in higher-margin yielding service-derived turnover, which gained 18% in the first half.
Although its top line was hampered by a lack of large deals, its gross profit increased 8% to R17.5 million, as a result of better margin sales in services, and not because product margins - which have been under pressure - are improving.
As a result, ISA will continue to focus on improving earnings in the future by increasing the depth and breadth of its managed security services offering and, "ultimately, their service-derived revenues".
Cash balances increased to R15.3 million and interest-bearing debt was reduced to R6.5 million during the half year, but ISA did not declare a dividend.
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