Slump takes toll on Stella Vista

Stella Vista Technologies sank into the red in the year to 31 August, incurring a headline loss of 5.41c a share compared with headline earnings per share of 1.27c the previous year.

The group designs mass communication systems specialising in light-emitting diode technology and it focuses on providing turnkey solutions by the integration of application- and location-specific designs and the development of software to complement the displays and processes.

CEO Muris Tabakovic says a 41% decline in turnover for the year to 31 August was the result of a general slump in the market.

However, the group did improve the gross profit margin after significant reductions in the prices of major imported components.

He says the price decreases and changes in technology required an impairment charge of R8 million to reflect the net realisable value of inventory on hand.

The group has been awarded the contract to supply the International Cricket Council Cricket World Cup with scoring software, scoreboards and the rental of video replay screens. The contract is to be completed by the middle of next April.

"The year under review has been difficult for most of the technology market, both locally and internationally," says Tabakovic.

"We have indicated previously that the size of the local market is unlikely to increase significantly over the medium-term. However, special events like the cricket world cup present significant short-term opportunities.

"For this reason, Stella Vista has identified the international market as the target for expansion."

However, current market conditions have led to an inability to raise extra funds to finance the expansion, slowing the group down in this regard.