AltX-listed Xantium Technology Holdings is well on the way to meeting its pre-listing forecasts with maiden interim headline earnings of R6.26 million beating mid-year expectations. Xantium debuted on AltX in August 2004 as the first black empowered IT company to list directly onto the exchange.
The group posted maiden operating income for the six months to November 2004 Of R9.26 million, off a R38.79 million revenue base. CEO James Murray attributes the slight dip below forecast in revenue to Xantium's deliberate emphasis on IT solutions services, which by their nature carry higher margins than IT hardware and software. Interim headline earnings translated into diluted headline earnings per share of 4.25c.
While debtors are high at R20.8 million, Murray explains that the large services contracts concluded only in the later part of the period pushed up this value and that R14.7 million of this amount had been collected by December last year.
Murray says the group's initial success has distinguished Xantium in the IT sector. "Against the backdrop of a challenging IT sector, Xantium's services and commodity business has sustained exponential growth month-on-month since inception in October 2003." He says Xantium's thorough business approach to IT solutions and its empowerment platform are the key contributors to the group's strong performance.
The group began an acquisition trail during the period to boost its services range and capacity, buying leading card and barcoding business Spec Systems for R30 million. The acquisition for the first time expanded Xantium's footprint outside of Gauteng to Cape Town and Durban, and Murray says: "Xantium will continue to expand its national reach."
Murray is positive in his outlook for the year to May 2005. "The unfounded Y2K-scepticism has encouraged reinvestment in technology with global IT spend rising slowly from the post Y2K-lull." He says business and government have, however, become more discerning IT consumers this time round, demanding more tangible value from technology solutions and systems.
"Xantium is in the enviable position of coupling capability and expertise with independently-rated strong BEE credentials to deliver innovative and solid solutions."
Overall Murray says the board is confident that Xantium is on track to meet the HEPS forecast of 7.25c per share for the year, as set out in its 16 August prospectus.
Share
Xantium derives its income from three primary divisions.
Xantium IT Services (XITS), offers complete IT solutions ranging from vision through strategic business consulting and design to implementation and ongoing support.
Xantium Professional Services (XPS) concentrates on helping clients to bridge the divide between business and IT, maintaining cost effectiveness while improving operational efficiencies.
Xantium Digital Card Systems provides smart card and other card-based services to the government, financial, transport, telecommunications, healthcare, mining, education and retail sectors. While smart cards assist with access control and time and attendance systems, other cards can be used for biometric identification, card-holder profile information, inventory control and loyalty programmes. FYI: www.xantium.co.za