Teddy Daka's Etion sees revenue drop
While Etion CEO, Teddy Daka was celebrating last night after winning the 2018 IT Personality of the Year Award, this morning his diversified digital technology group reported a drop in its revenue for the period ending 30 September 2018.
Etion attributes the drop to subdued trading conditions, delays in the delivery of a key rail project to the value of R22 million and a large cyber security project to the value of R21 million, causing revenue slippage to the second half of the year.
The group has reported a 14.4% decrease in revenue from R314.4 million in the corresponding period last year to R269.1 million in the current period.
At a gross profit level (R99.2 million), the revenue shortfall was nevertheless offset by good margins generated by the recently acquired cyber security specialist, LAWtrust, which has reported revenue of R51.2 million for the first four months since acquisition, the company says.
Earnings before interest, tax, depreciation and amortisation is down by 81.2% from R47.3 million to R8.9 million, and profit after tax has decreased by 103.8% from a profit of R28 million in the previous period, to a loss of R2.4 million in the current period.
Similarly, the cpmpany says headline earnings per share decreased by 108.3% from 6.11 cents to -0.5 cents and net asset value has decreased by 1.9% from 64.4 cents to 63.2 cents.
It explains that the decline in profit after tax was due to the finance costs related to the LAWtrust acquisition, as well as to an increase in operating costs, lower contributions from the existing businesses, and the absorption of the LAWtrust cost base of R26.4 million.
Etion CEO, Teddy Daka, says while the results reflect a number of factors (including the impact of macroeconomic influences) prospects are positive for the remainder of the year, with the segments in which the Group operates showing growth on a global basis.
"At operational level, we will, of course, continue to optimise margins, manage expenditure, control cash flow and improve reserves," says Daka. "We will also continue to invest in plant, equipment and human capital in order to remain ahead of the digitisation curve, which is vital to our long-term success.
"On the back of this, we expect a significant recovery in the performance of the Group in the next half of the year."