IT services and solutions provider Paracon is expected to announce soon that a black empowerment company has acquired a stake in the company.
<B>Salient figures</B>
Paracon results for the year to 30 September 2002.
Previous year`s figures in parentheses, move in square brackets:
Turnover: R445.43m (R455.74m) [-2.3%]
Continued operations: R387.72m (R351.91m) [+10.2%]
EBITDA: R36.36m (R42.26m) [-14%]
Continued operations: R37.08m (R37.73m) [-1.7%]
Profit before tax: R12.86m (R44.86m) [-71.3%]
Attributable profit: R3.03m (R31.73m) [-90.4%]
HEPS: 9.8c (9.5c) [+3.2%]
Basic EPS: 1c (7.7c) [-87%]
Current assets: R111.45m (R130.94m)
Cash and cash equivalents: R72.62m (R62.44m)
Current liabilities: R23.82m (R49.49m)
NAV per share: 44.6c (45c)
NTAV per share: 28.2c (23.9c)
Speaking at the release of the company`s results for the year to 30 September, CEO Mark Jurgens said the company had hoped to make an announcement yesterday.
"Unfortunately this was not to be, but it will happen soon," he says.
Jurgen says Paracon does not have good empowerment credentials and this has made it difficult to win government and parastatal business.
"Even the private sector is putting pressure on suppliers to have empowerment credentials."
Paracon has declared a maiden dividend of 2.5c a share after some debate in the boardroom. However, financial director Mireille Levenstein says the decision was made after noting that the group had sufficient resources and is strongly cash-generative.
Paracon no longer has offshore operations after the disposal of its 71% stake in US-based Mercury Technologies for $0.75 million. Mercury`s results have been disclosed as discontinued operations on the financial statements.
Levenstein says with turnover of R57.7 million and an operating loss of R0.7 million, the negative effect on the group`s margins was significant. In addition, further losses were being forecast.
"We decided it would be better to cut our losses and bring those excess cash resources back to SA," she says.
The disposal, as well as a focus on improving debt collection, also helped reduce debtors days from 47 days to 38.
However, the disposal had a negative effect on attributable earnings and basic earnings per share mainly as a result of the impairment of goodwill, which took R15.52 million off the income statement.
The income statement also records a loss of R5.64 million on the disposal.
On a continuing operations basis, Paracon`s turnover rose 10% to R387.72 million, while earnings before interest, tax, depreciation and amortisation fell by 1.7% to R37.08 million.
Jurgens says he does not expect market conditions to improve over the next year. If this is the case, the group should report similar results next year, although it is well positioned to benefit from any improvement in the market.
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