UCS Group`s headline earnings per share fell to 5.7c in the six months to March, 14.9% down on the 6.7c of the same period a year earlier.
The group predicted at the release of its last full-year results that the first half of the 2005 financial year would be challenging, mainly because a focus on generating sustainable annuity streams meant overhead structures would grow ahead of new business billings.
At the same time, delays on installations would have a short-term negative effect on margins.
CEO John Bright says the results represent a "mixed performance" by the operating business units. While most met or exceeded budget targets, the results from the recently consolidated UCS Software business unit were disappointing.
Revenue of R261.89 million for the period was 6.5% up on the R245.86 million of the previous year. Software accounted for 55.8% of this figure, while solutions and services contributed 44.2%.
However, software accounted for only 6% of the R13.79 million profit before interest and investment income, while solutions and services contributed 89.4%. The balance was attributed to corporate and eliminations.
Bright says earnings of R33.3 million (2004: R33.6 million) before interest, tax, depreciation and amortisation, reflect the pressures on margins caused by project delays experienced in the software business.
Profit before tax slipped by 11% to R13.81 million (R15.52 million), while the R11.39 million net profit was 18.1% down on the R13.91 million a year earlier.
Basic earnings per share fell from 5.9c to 4.8c. The weighted average of ordinary shares in issue was up 1% at 239.5 million, compared with 237.5 million shares previously.
Bright says the group expects a stronger performance for the second half of the financial year, despite some challenges remaining. The board has declared an interim dividend of 2c a share, to be paid on 8 August.
"Management forecasts give promise of a significant improvement during the second half of the year and indicate that the group should record real growth in earnings for the full year."
Share
