Harsh trading conditions in the ICT industry are showing signs of improvement, says UCS Group CEO John Bright.
Bright says that in the six months to 31 March, the group`s operational performance exceeded budget and solid progress was made in meeting strategic objectives.
UCS`s revenue for the period increased by 75.2% to R245.86 million from R140.37 million for the same period a year earlier. Bright says 54% growth was due to acquisitions, with the other 21% through organic growth. Annuity revenues accounted for 58% of total revenue.
This was the first full six months of trading since the acquisition of Affinity Logic, since renamed UCS Solutions. "However, the full synergistic benefits of this strategic acquisition are only expected to be achieved over the next two to three years," he says.
A net profit of R13.91 million compares with a year-earlier profit of R10.43 million, while headline earnings per share of 5.9c were 31.1% up on the previous 4.5c. An interim dividend of 2.3c a share has been declared and should be paid on 7 June.
"The group has continued to increase its footprint in its chosen markets and the extremely harsh trading conditions for ICT companies of the past few reporting periods are showing signs of improvement," says Bright.
He says UCS has a healthy order book and prospects for the second half of the year are promising, although not without challenges.
"The group`s focus on the generation of sustainable annuity revenue streams means that overhead structures grow in advance of new business billings and any delays on installations can have a short-term negative impact on margins.
"In addition, the synergistic benefits of the various restructuring programmes currently under way are only expected to flow through to the bottom line over the next two to three years. Given these factors, management is cautiously optimistic that the group should achieve satisfactory growth in headline earnings per share for the full year."
Share
