IT services group UCS Group has declared its first dividend since listing in 1998.
MD John Bright says the decision to institute a policy of paying two dividends a year, amounting to about a third of headline earnings per share, was reached after the board reviewed the group`s cash requirements.
<B>Salient figures</B>
UCS Group results for the six months to 31 March 2002
Figures for the year-earlier period in parentheses:
Revenue: R100.66m (R78.85m)
Profit from operations before interest, depreciation and R&D: R22.06m (R19.56m)
Profit before tax: R13.58m (R15.92m)
Net profit: R12.37m (R13.25m)
HEPS: 5.4c (5.2c)
NAV per share: 72.1c (61.9c)
NTAV per share: 59.1c (51c)
Current assets: R130.15m (R115.73m)
Cash: R82.72m (R76.37m)
Current liabilities: R29.22m (R19.34m)
Cash generated from operations: R15.55m (R14.69m)
Along with the announcement of its results for the six months to 31 March, UCS has declared an interim dividend of 1.8c per share.
Bright says revenue growth of 28% was achieved despite "extremely difficult" trading conditions. "It is particularly encouraging to note that 27% of the 28% increase in revenue was directly attributable to organic growth in the group`s core operations and that only 1% came from acquisitions."
However, he adds that strong revenue growth was slightly offset by difficult trading conditions that continue to characterise the local retail sector.
"Customers throughout the group`s primary markets have cut back dramatically on IT budgets in the face of an extremely volatile economic climate," he says.
"Fierce competition, particularly for certain categories of products, contributed to a lower than expected increase of 14% in operating income before research and development, depreciation, amortisation and interest.
"However, the group`s commitment to the sale of its own technology and services, as well as the generation of sustainable annuity income revenue streams, continues to help avoid the full impact of the negative sentiment in the market."
Investments in research and development - up by 36% - restricted growth in earnings before interest, taxation, depreciation and amortisation to 5%.
"These investments are starting to bear fruit," Bright says. "During the period, the group`s new flagship Linux and Java-based retail solutions platform, a major target for our R&D efforts, was released with a fully customised solution being successfully commissioned into a furniture chain of 32 stores."
The group`s staff share trust is to be restructured so that options are granted instead of shares being sold outright to staff members.
The UCS share price was unchanged at 76c on the JSE this morning.
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