DigiCore, which reported a full-year loss, believes it is back on track after refocusing and reorganising its business.
CEO Nick Vlok, speaking during the results presentation yesterday afternoon, said it would focus on key market segments and reduce legacy products. It is also concentrating on working capital issues and improving cash collections.
DigiCore's share closed flat at 140c yesterday.
In the year to June, DigiCore reported revenue flat, at R863 million, despite the higher shipments. Its group's net loss of R52 million was largely due to a R57.5 million write-down of its European unit. Last year, it recorded a net profit of R30 million.
Vlok says the results are "what they are", but a lot of hard work has gone into the business in the past six months. He says DigiCore is "back on track".
DigiCore has not written down its UK entity completely, as there is a "bit of hope", says Vlok. He explains the company reacted too slowly to the economic slump in Europe, although the loss has been trimmed from R22 million to R6 million.
Loss-making units in the UK and Europe will be closed or turned around this year, says Vlok. He notes the investment in the insurance segment there is finally starting to pay off.
DigiCore was also impacted by the loss of connection incentive bonus commissions worth R7.5 million, but notes it has trimmed the cost base in this area. It is investing in its insurance segment, where driver behaviour information gleaned from telematics can be used to predict accidents.
Sharp focus
Vlok is confident this will start paying off this year. He adds the company is looking towards Australia and Malaysia, where there are opportunities in the insurance sector.
The group's focus, detailed at half-year, is to concentrate on providing driver behaviour to the insurance industry, offer complete fleet management systems, provide electronic fare collection systems, and play in the stolen vehicle recovery market.
Vlok says, a year or two ago, it was trying to be everything for everyone. The company has, during the year, restructured the board and senior management, consolidated its business units, and embarked on cost-saving initiatives.
DigiCore has also inked financing deals that will help with its cash flow, is looking to push product through dealerships and has reworked its agreement with Discovery Insure, its biggest client. Vlok says it has also changed its sales model.
The company was founded in 1985 and listed on the bourse in 1998. It employs more than 1 200 people in 56 countries. Vlok says, despite the restructure, the company has not materially decreased its headcount and is looking for staff in key areas.
DigiCore sold more than 730 000 telematric systems, and shipped 89 228 systems during the financial year.
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