There was some confusion on the market this morning after accounting software distributor Synergy Holdings reported an incorrect revenue figure on the JSE's news service and in newspaper ads.
<B>Salient figures</B>
Synergy Holdings results for the year to 28 February 2003.
Previous year's figures in parentheses, move in square brackets:
Gross revenue: R18.91m (R12.31m) [+54%]
Operating profit: R1.1m (R0.46m) [+137%]
Net profit: R1.27m (R0.52m) [+142%]
EPS: 2.33c (0.84c) [+178%]
HEPS: 2.34c (0.81c) [+189%]
Net cash from operating activities: R1.44m (R0.8m)
Current assets: R4.95m (R3.39m)
Bank balances: R2.96m (R1.52m)
Current liabilities: R1.8m (R1.59m)
NAV per share: 7.94c (5.27c)
NTAV per share: 7.94c (5.27c)
The group reported erroneously that revenue for the year to 28 February 2002 came in at R8.91 million, compared with R12.31 million the previous year. One newspaper even quoted a company spokesman commenting on the reason for the revenue decline.
In fact, the reported figure was out by R10 million, with actual revenue increasing by 54% to R18.91 million.
"Somewhere we lost R10 million on the reported revenue figure," says CE Patrick Toolan. "We're not 100% sure how that got through."
The mistake belies the fact that Synergy had a good year, with the rest of the group's figures also showing healthy growth. Improved earnings and positive cash flows led the software provider to declare a maiden dividend.
Asked if it is the company's policy to declare a dividend from now on, Toolan said it would always depend on the cash situation. "We won't make it a policy at the moment, but I think we can expect to declare a dividend from now on," he says.
Synergy owns the entire share capital of Prime Support, which focuses entirely on providing Accpac Accounting Software solutions through its three divisions - Synergy Accounting, Synergy Networking and Appsoft.
The group's operating profit increased by 137% to R1.1 million (R0.46 million) while net profit was boosted by 142% to R1.27 million (R0.52 million).
Toolan says the group has demonstrated its ability to maximise cash flows, which the board believes will be sustainable.
"Cash flows have been positive and the improved earnings can be seen in the improved cash balance, rising from R1.4 million to R2.57 million, resulting in the board resolving to declare a maiden dividend."
Shareholders registered as such on 27 June are to receive a dividend of 1c a share.
"We are hesitant to make any form of prediction given the current market conditions," Toolan says. "However, we are confident that there will be earnings growth in the new year."
He says the small to medium enterprise market's post-Y2K turnaround appears to have begun last year. "The reason it began there is their spend is smaller and therefore their decision cycle is smaller."
The Synergy share was untraded at 3c on the JSE this morning.
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