IST`s earnings surge

Electronic and software technology company IST Group has reported a 62.5% increase in its interim headline earnings per share despite only a marginal improvement in revenue.

While revenue increased only 3.7% to R145.17 million for the six months to end-August, IST achieved a 59.1% improvement in earnings before financing costs, tax, depreciation and amortisation, which came in at R24 million.

CE Harry Coetzee says the results are satisfactory even though trading conditions in IST`s markets, particularly the telecommunications sector, remained difficult.

He says all the group`s operations contributed to the group`s performance during the period.

The group had to provide for a write-off R4.8 million in foreign debt, which Coetzee says is related to the sale of the North American guided parachute business in 2000.

"The terms of the sale required payment of long-term debt owed to IST by these former subsidiaries. The businesses are now in difficulties and, while the group will pursue its recovery vigorously, it has been deemed prudent to provide for the outstanding balance of the debt."

Coetzee says future prospects could be dampened by world events.

"Trading conditions are not expected to improve in the second half of the year and the group`s defence-sector market in the Middle East may be affected if the threat of military action against Iraq becomes a reality.

"However, all IST`s divisions expect to sustain their strong performance and, barring a major deterioration in its operating environment, the group is well placed to improve on last year`s performance."

The group`s share price was unchanged at 98c on the JSE this morning.