JSE-listed Softline's core earnings were flat for the year to 31 March 2001, which CEO Ivan Epstein blames on a global slowdown in the accounting software industry.
The business and accounting software group has separated the results of troubled US subsidiary SVI from its figures, since its shareholding has been diluted to less than 50% and it no longer controls the company.
The move is also a bid to show that the core business of the group is healthy. The inclusion of SVI's figures would paint a dismal picture.
Excluding SVI, revenue increased 16.7% to R412.46 million from the previous year's R353.56 million. Had SVI's results been included for the six months before the shareholding dilution, total revenue would have shown a fall from R603.57 million to R531.17 million.
Sustainable earnings per share rose only marginally, from 28.1c to 28.3c, although fully diluted basic earnings per share plunged from 35c to 5.9c. Attributable profit for the year fell from R124.56 million to R22.6 million.
Epstein says the results are satisfactory in light of the global accounting software industry slowdown after Y2K as well as the sluggish take-up of e-commerce.
"Softline was not immune from these tough trading conditions," he says. "However, our core business remained profitable and highly cash generative.
"This is underscored by Softline's healthy operating margin of 28% and the marginal growth in operating profit from core operations - excluding exceptional items - to R114 million from R110 million in the prior year."
He adds that Softline acted in the period to curtail loss-making operations, cutting overheads and improving working capital management. The result, he says, is a leaner and more focused group.
Cash fell to R39 million from R206 million previously, mainly because of acquisitions (R80 million) and a R79 million loan to SVI.
Epstein says the group is in advanced talks to dispose of a major portion of its holding in SVI.
The Softline share was trading 11.7% or 19c down at 144c on the JSE this morning.
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