JSE-listed business solutions provider Square One Solutions has improved operating profit by 120%.
In its interim results to end-June, the company says operating profit grew from R2.36 million to R5.2 million.
CEO Trevor James attributes this to a reorganisation of the group over the last few years, which saw it place more emphasis on higher-margin solution-based business. "[Growth] comes on the back of some tough years in the IT market.
"We are seeing the positive impacts of the reshaping of the business and the emphasis we have placed on partnerships with technology leaders and world-class brands, as well as in the development of skills and services that differentiate us in the marketplace."
Earnings per share rose from 2.8c to 9.8c and headline earnings per share doubled from 4.9c to 9.8c as the company posted a 156% increase in headline earnings from R1.07 million in the first half of 2005 to R2.74 million for the same period this year.
Net profit after tax increased four-fold to R2.7 million from R626 000, while pre-tax profit was at R3.86 million, up from R851 000.
The company, which has R3.57 million in cash at the end of the period, intends growing further. James says it will use the cash to grow the company in a controlled manner going forward.
A larger footprint
<B>Fast figures:</B>
A synopsis of Square One's half-year results to end June 2006
Comparative figures in parenthesis
Revenue: R96.6m (R95.9m)
Operating profit: R5.19m (R2.36m)
Pre tax profit: R3.86m (R851 000)
Post tax profit: R2.74m (R626 000)
Cash-on-hand: R3.57m (-R779 000)
Headline earnings per share: 9.8c (4.9c)
Current assets: R64.88m (R49.38m)
Current liabilities: R47.9m (40.83m)
Current ratio: 1.35 (1.21)
Square One's recent R5 million acquisition of network services provider NETintellect, which extended its footprint in the KwaZulu-Natal and Western Cape regions, is also expected to pay dividends.
"We expect to see the real benefits of the NETintellect acquisition in the second half of the year and to gain further impetus in our business solutions division as a result of our recent Microsoft Gold Partner certification, which underlines our competency and ability to deliver Microsoft solutions to a broad business user base."
The company's results announcement comes on the back of news that it has won a R1.4 million contract to provide Pick 'n Pay's new headquarters in Kenilworth, Cape Town, with a UPS system, which has now been installed and commissioned.
Square One's share was up 4.55% on the day to R1.15c by 4pm after the results announcement.
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