Pinnacle Technology Holdings is moving beyond the boundaries of the ICT sector and is looking for more opportunities to add to its portfolio.
CFO Chris Smyth says Pinnacle's biggest strength is its distribution, and it does not matter what it is moving. “We need to build on that skill.'
Pinnacle is not an expert in computers, but is an expert in moving them around, says Smyth. He says the group wants to add more services, as well as cloud computing. “We are looking at everything; it's blue sky.”
Smyth says Pinnacle, as a technology group, will continue to change.
In the year to June, Pinnacle reported revenue up 18%, to R5.8 billion, while headline earnings per share gained 49%, to 175.1c. Analysts consider headline earnings to be a key indicator of performance as it strips out unusual items.
Pinnacle declared a 35c a share dividend, which is a 52% gain.
Smyth says the group is pleased with the results, although trading conditions became tough towards year-end. The growth in turnover was not due to volume gains, but more because Pinnacle added value and benefited from foreign exchange movements, he says.
Pinnacle achieved good margin gains as it kept costs under control.
More deals
Smyth says the group's results include a full year of contributions from Axiz, which only added eight months last year. The group also did a few smaller deals, such as its Infrasol unit buying 51% in Merqu Communications for R3 million, which gives it control.
Merqu provides Pinnacle with expertise in data centre design and installation. Pinnacle says “data centres are an integral part of the cloud computing infrastructure and the demand for data centre expertise will grow together with the explosive expansion currently being experienced in cloud computing”.
In addition, AxizWorkgroup acquired the entire business of e-Secure as a going concern for R5.1 million, on 1 January. E-Secure is a business that imports and distributes Internet security and network optimisation products.
Pinnacle bought Axiz in 2010, for R150 million, to gain R2 billion in annual revenue. At half-year, it said it would wrap up integrating Axiz into its Workgroup unit by the end of this financial year, which will aid turnover and profit growth.
Smyth says it is difficult to tell if Axiz has added the expected figures to the top line as the group has been restructured and integrated to gain synergies. He says Pinnacle has segmented the market a bit more and the numbers are not directly comparable.
Pinnacle is keen on acquisitions as this is one way that the group grows. Smyth says the growth could come from outside ICT as the group is adding more services to its portfolio.
The listed company will grow into the security arena and try to own as much of the supply chain as possible.
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