Shares in Poynting ended the day at a new 52-week high yesterday, after it said earnings per share gained 68.4%, to 4.11c, as it bolstered revenue 27.4%, to R53.5 million, in the first half of the year.
The stock gained 6.4%, or 21c, to 349c, beating the broader market, which closed 0.33% lower.
Poynting says its performance for the six months to December was mainly driven by its defence division's "excellent results" with a profit after tax contribution of R9.9 million, a 227% increase from revenue of R37.6 million (73% increase).
However, these gains were offset by a disappointing loss of R2.1 million in its commercial division and a loss of R3 million in the CCS division, as well as losses of R1 million due to new business development.
Growth targets
Poynting adds its growth plan is continuing, with the main focus being acquisitions to improve international sales channels and add on to its current offerings, including telecommunication and digital television.
It says it "is trying to position itself as a leading player in the triple play future market where it is widely believed that TV, voice and Internet communications will converge, since all are inherently digital. We are actively engaged in this growth plan with a pipeline of opportunities, which are being actively pursued."
Poynting's growth plan, which aims to take revenue to R1 billion over a three- to five-year period, was agreed upon last year. It has said strategic acquisitions will add between R50 million and R100 million in revenue, while turnover will be boosted to the tune of between R200 million and R400 million through autonomous acquisitions.
New business areas should add between R100 million and R300 million to the top line, and growth overall will contribute R150 million to R350 million.
CEO Andre Fourie explained six months ago that the company wants to make strategic acquisitions that will be bolt-on deals that will aid its current units. He says these will either be new products or new distribution channels.
"Growth will be in the form of acquisitions of new businesses, including strategic acquisitions to expand current business divisions in terms of product and distribution, and investing into completely new business areas." Fourie said the company is looking for acquisitions that can take it into new markets.
Poynting designs, manufactures and supplies antennas and telecommunication products to the cellular, wireless data and defence markets within SA and internationally, through its subsidiaries and partner companies.
Restructuring
Poynting's export markets primarily incorporate Europe, the US, the Middle East and Asia, and sales outside of SA now account for 68.3% of revenue, up from 51.7%.
The group operates four divisions: commercial, defence and the recently-formed CCS, in addition to its new business unit. Poynting established CCS as a vehicle to invest in the micro base station market.
Poynting says its commercial operations are showing the benefits of mass production in China, but restructuring of its sales channels and production facilities in China negatively impacted profitability. "These disruptions are now largely complete and better performance is expected in the second half."
Although sales at CCS, which is distinct from its commercial division, have been stagnant, the unit is being restructured to reduce operational costs and improve product sales and marketing, it says.
Expenses in its new business unit related to some new digital television consumer products, such as the SunPoynt TV and the new DigiAnt antenna. "These are progressing well and we are continuing with these and other new business endeavours."
Poynting has said it wants to capitalise on Africa's digital television migration plans. The International Telecommunication Union will stop protecting analogue broadcast in the middle of next year, and the continent is slowly moving off that outdated signal.
In SA, the move has been much delayed over recent years, with several launch dates being missed. To tap into the shift, Poynting has bought African Union Communications (Aucom), in a deal that was wrapped up after year-end.
The listed group, which makes antennas and telecoms products, bought Aucom for R49.5 million, which it paid for by issuing 66 million shares, at 75c a share.
Aucom provides products, system integration, and implementation and commissioning services to broadcast and telecoms markets.
Share