SecureData revenue jumps

Information security and risk management company SecureData will look at adding to its stable once debt reached a level it was happy with.

CEO Dean Brazier says the company has identified sectors in the UK market that it would like to invest in, but this will have to wait until the company is cash positive, which is expected to happen around year-end.

In the year to July, the company grew revenue 71%, to R464.6 million, and operating profit jumped 57%, to R57.3 million. Brazier explains that most of the growth was as a result of its MIS acquisition.

Stripping out the new entity, revenue would have grown 10% and operating profit about 11%, he says. MIS was incorporated in the company's results for a full-year, whereas last year it only added two months.

SecureData provides information security and risk management products and services to the channel and end-users in SA, and some countries in sub-Saharan Africa. It has five divisions.

The group announced, last May, that it was buying MIS Corporate Defence Solutions in the UK for £14.2 million. MIS offers a range of security and mobile connectivity products and services to the UK market. It acts as a reseller of security products and as an outsourced provider of security monitoring and threat mediation services.

Brazier says the deal meant the company incurred about R100 million in debt, which has since been paid down to R30 million. He says this is a position that the company is happy with, and a new acquisition could take it to this level again. “We are in a good position to take advantage of opportunities.”

Service revenue accounted for 23% of group revenue at more than R100 million, and revenue generated outside of SA was 40% of group earnings, while annuity revenue was 43%.

Brazier says three years ago, the entire company was turning over about R100 million.

However, earnings and headline earnings per share were affected by a R10.9 million amortisation charge, a R9.8 million foreign exchange loss on inter-group loans, a R5.5 million loss on foreign exchange forward contracts, and a R1.6 million loss on interest rate swaps.

SecureData says stripping out these items, earnings and headline earnings per share would have been 8.8c higher, but were only 2.9c. Last year, earnings and headline earnings per share were 5c a share. The company says earnings and headline earnings per share are a “poor indicator of the group's operational performance”.

Related story:
SecureData earnings plunge