Secure electronic transactions company, Prism Holdings has turned in solid results for the 12 months to 30 June 2004.
Although the company reported a 7% drop in headline earnings to R26.9 million (R29 million) and a 14% decline in group revenues to R263.1 million (R304.1 million), it finished the year with R60.2 million cash in the bank, up from R24.5 million at the same time last year.
Prism Holdings CEO Alvin Els points out that the company has in dollar terms experienced an effective revenue increase of 14%.
Els says when reviewing Prism`s results, one should consider the fact that Prism generates 60% of its revenues in US dollars - and that the average dollar exchange rate for the review period was 24% lower than during the previous year. Compounding the impact of the strengthening rand was the fact that the selling price of SIM cards dropped by 41% in line with world sales trends. These two factors effectively offset the impact Prism should have experienced in turnover in increasing the volume of its SIM card sales from 6 million in the previous review period to 22 million.
"Prism`s turnaround which began last year has not only been sustained, it is gaining momentum. Effectively, Prism ended the review period substantially stronger than it was in June 2003, with R60 million cash in the bank."
Els attributes Prism`s `satisfactory position` to several factors: improved management of inventories, debtors and creditors; and maintaining cost increases at just 5% despite significant growth in operational output. Proof, he says, that the cost control measures implemented by Prism during the previous reporting period are effective.
Prism`s spread of customers, geographic location and industry sector has also broadened, making Prism less reliant on individual customers and technologies as it had been in the past.
"We were also able to increase our gross profit margin from 55% to 61% as a result of our continued focus on the sale of our intellectual property (IP) in software and services as opposed to product."
Despite the good news, Els sounds a note of caution. "The value of the rand remains a cause for concern. Further strengthening of the currency may necessitate a re-evaluation of certain initiatives and expansion plans. We do, however, have contingency plans in place to deal with such an eventuality. Meanwhile, Prism will continue to build on the solid foundation that has been laid," he concludes.
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JSE-listed Prism Holdings Limited is a leader in the field of secure electronic transaction products, solutions and services. The group has a strong presence in SA and an established and expanding footprint across Africa and South-East Asia.
Prism has a proven track record in the delivery of secure electronic payment technologies and end-to-end solutions for the retail, utilities, banking, cellular and petroleum industries. The group has developed and implemented innovative payment-centric Intellectual Property that bridges the following technologies:
* Chip cards including SIM cards, financial smart cards and telephone cards.
* Point-of-sale frameworks, applications and devices.
* OEM transaction modules including PINpads, card readers and self-service terminals.
* Transaction security modules and servers.
* Payment servers, messaging gateways and value-added-services gateways.
* End-to-end secure electronic payment architectures for wired and wireless networks.