Shares in Poynting leapt yesterday after it said its earnings for the full year would be at least 20% higher.
Stock in the company, which makes antennas and telecommunication products, moved 10% higher to close at R1.10 on a day that the bourse gained 1.49%. Poynting said both earnings and headline earnings would be at least 20% higher in the full year.
Last year, revenue was slightly lower at R80.97 million, compared with R81.5 million, and it improved its profitability, moving from R2.6 million last year to R7.2 million.
In the six months to December, Poynting grew revenue from R38.8 million to R42 million, while profit after tax gained from R1.9 million to R2.2 million. The company historically has a stronger second half performance.
Bulking up
It said at the time that indications were that the second half should be stronger. It also undertook a growth initiative involving acquisitions, business expansion and organic growth aimed at significantly increasing turnover in the next three to five years, it said.
Last month, it bought African Union Communications for R49.5 million, which it paid for via the issue of 66 million shares at 75c a share. It will also pay out 50% of the actual net profit in the 2014 and 2015 years if net profit moves beyond R38 million for each financial year.
Aucom, which is based in Pretoria, provides professional products, system integration, and implementation and commissioning services to the broadcast and telecommunications market in Africa. It supplies satellite distribution networks, direct-to-home satellite and contribution links.
Digital driver
In March, Poynting said it had "made several breakthrough inventions" in terms of set-top boxes, installation of digital television systems, and antennas and antenna manufacturing. The intellectual property has the potential to deliver significant future returns, and it has started a new business unit to take advantage of the potential, it says.
Poynting says, over the past two years, Aucom and Poynting have cooperated in developing digital television opportunities. "Excellent synergies have developed between the two parties."
SA is moving from analogue TV to digital in the first major technological change to terrestrial TV since launch in 1976. Turn-on is now scheduled for the second half of this year, with turn-off of analogue about three years after that.
Africa is also migrating in line with the International Telecommunication Union's decision to stop protecting analogue broadcast in the middle of 2015.
Poynting notes the deal, which will fall in its 2014 year, has not been included in its results for the 12 months to June.
Poynting adds it will issue a further trading statement once it has a greater degree of certainty with regards to its financial results for the year, which should be published on 27 September.
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