Slower sales at SecureData's local unit, as banks and government held off spending, led to revenue declining in the first six months of the year.
The company, which distributes security solutions and risk management solutions for the African sub-continent and Indian Ocean islands, says revenue dropped from R220 million to R198.96 million in the six months to January.
SecureData says the first half of the year was “a difficult period” for the group and SecureData Africa, in particular. The company's African unit, which accounted for R115.3 million in revenue and is the company's largest unit, reported revenue 13% lower.
CEO Dean Brazier explains that the local operations have a large exposure to the public and financial services sectors. He says both these areas held off on spending during the first half of the year, which impacted the company.
Brazier says SecureData Africa didn't see the deal flow it had expected, based on its project pipeline. Some of the lost deals may come back in the second half, or in future, he adds.
However, Brazier is cautious because the second half, although traditionally stronger, could be affected by the same malaise that saw revenue slow in the first six months. The second half usually accounts for between 60% and 65% of annual revenue.
SecureData ended the first half R8 million down in earnings before interest, tax, depreciation and amortisation. Brazier expects to recoup between R2 million and R3 million of this in the second half, as the company does have a solid pipeline.
Despite the slowdown, Brazier expects the spending to return over the long-term, pointing out that banks and the public sector cannot afford to hold off security spending indefinitely.
SecureData Europe also saw revenue down 7.3% in rand terms, to R72.8 million, as a result of the stronger rand. In Sterling, revenue would have improved 3.5%. SensePost, however, grew revenue 24.3%, to R2 million
The company's share closed flat at 89c yesterday.
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