Square One Solutions Group released mixed results for the year ended December 2008, with revenue up, but profit taking a knock.
However, the company is upbeat about its future prospects, saying: "While the results appear to indicate a decline in the business, the fundamentals and state of contracts are all healthy."
The company has also ventured into the public sector and says it has concluded strategic partnerships with parastatals that will see good returns. Analysts have noted on several occasions that government and annuity-based business will carry technology companies through the current global economic crisis.
Even though operating profit is down to R2.5 million from last year`s R10.3 million, Square One says its existing business is still profitable. "Square One is geared up to service the new business opportunities recently secured. The strategic direction of the group remains consistent with previously stated intent and the group has used this solid foundation as a springboard into the newly acquired markets and client base," it explains.
The company says it has embarked on a cost-cutting exercise that took effect in the new financial year. "Operating costs have reduced after period end and it is anticipated that Square One will realise the benefits from the new direction taken in the second half of the year."
Revenue is up from last year`s R163.6 million to R207.8 million, and revenue will continue to be stronger over the next financial period, it notes.
Earnings attributable to ordinary shareholders are down to R83 000 and headline earnings per share fell to 0.4c per share.
Square One expects a continued, managed and sustainable growth trend in its strategic areas of focus. Operating costs have reduced after period end, and it is anticipated Square One will realise the benefits from the new direction taken in the second half of the year.
With the groundwork now in place, Square One expects to unlock greater profitability, while continuing to secure additional, sustainable and predictable contract-based revenue for the group.
The company`s results are a far cry from the success it showed in the same period last year, when it boosted profit by 47% and increased headline earnings by 29%. However, the company`s interims for the year indicated certain aspects of the business were taking strain.
Related stories:
Square One`s earnings fall
Back to Square One
Share
