JSE-listed Poynting, which makes antennas and telecommunication products, says it has "made several breakthrough inventions" in terms of set-top boxes, installation of digital television systems, and antennas and antenna manufacturing.
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 middle of this year, with turn-off about three years after that.
Poynting says it previously avoided the television antenna and accessories market, but through partners in this area and incentives by the Department of Communications' digital migration project, it has made several breakthrough inventions in terms of set-top boxes, installation of digital TV systems, and antennas and antenna manufacturing.
"These offer advantages on existing technology and a large market exists for this technology locally, in Africa and elsewhere."
Around 10 million homes will need set-top boxes to convert the new signal for viewing on analogue televisions. The state is subsidising 70% of the cost of the box, and all the cost of new aerials where required, for five million homes.
Poynting has filed various patents and designs, and has developed some new software and systems to enable successful rollout of digital TV to consumers, it says in its results commentary for the first six months of the year. 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.
Targeting growth
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.
It says indications are that the second half should be stronger. Poynting has also undertaken a growth initiative involving acquisitions, business expansion and organic growth aimed at significantly increasing turnover in the next three to five years, it says.
The first fruits of this growth programme are the nascent cellular coverage solutions (CCS) division, the new digital TV expansion, and the acquisition of Radiant Antennas, accompanied by expansion into the military communications market. "The board is placing a high focus on this growth initiative, and further successes will be communicated to shareholders as and when these happen."
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. Poynting's export markets primarily incorporate Europe, the US, the Middle East and Asia.
The group operates as three divisions: commercial, defence and the newly-formed CCS. Poynting established CCS as a vehicle to invest in the micro base station market.
CCS has moved to third-generation long-term evolution micro base station technology. "This billboard-sized device encompasses a number of patented technologies and potential demand for these base stations will be millions of units per year over the next five years," it says.
The new unit made an earnings before interest, tax, depreciation and amortisation loss of R1.6 million in the first half. Its expenses relate to product development, new technology and marketing, while actual income is limited to trial installation and prototypes for network approval and customer acceptance.
Real profitability is only expected in the 2014 financial year.
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