Paracon is expecting another good year, coming on the heels of a 53% increase in full-year headline earnings.
CEO Mark Jurgens says in addition to other contracts won, the recent acquisitions of Faritec Contracting and Time Quantum Cape Town have brought in significant deals, including wins with the Western Cape government and Shoprite Checkers.
Paracon Resourcing, the division into which those businesses were placed, is now the largest database of ICT skills in SA, bigger than AST and Business Connexion`s resourcing operations, Jurgens says.
Earlier this year the group announced it was acquiring the business of Time Quantum Gauteng for R34.5 million. This was not an outright acquisition, but an option into which Paracon had entered.
Jurgens says the group is negotiating to extend the option period as there were some issues at Time Quantum that needed to be resolved, although he would not elaborate on this.
"Once we are sure there is no risk to the Paracon business, we`ll go ahead with that deal," he says.
Jurgens says he is excited about the year ahead. "We`ve seen an upturn in the IT industry, specifically among our clients." The acquisitions and Paracon`s empowerment credentials stand it in good stead to take advantage of the revitalised sector, he adds.
Bonus for shareholders
Financial director Mireille Levenstein says the board has recommended a cash distribution of 3c a share, to be paid out of share premium.
She says Time Quantum contributed only three months` performance to the results for the year to September, with Faritec beginning to contribute only after the financial year ended.
Despite this, Paracon achieved a 46% increase in earnings to R23.93 million before interest, tax, depreciation and amortisation, compared with R16.37 million the previous year. This was on a 6% rise in turnover from R344.93 million to R365.93 million.
Paracon Resourcing contributed 81% of turnover, while 19% came from Paracon Solutions.
Pretax profit rose by 66% from R13.33 million to R22.15 million, and attributable profit went up by 96% from R7.39 million to R14.47 million.
Headline earnings of R22.77 million compared with earnings of R14.93 million previously, while headline earnings per share were up 40% from 4.2c to 5.9c.
Cash on the balance sheet amounted to R105.11 million, compared with R109.73 million at the previous year-end, although this did not take into account the Faritec Consulting acquisition, as Competition Board approval for that deal was received only in October.
The Paracon share was trading at 95c on the JSE this morning, down 5c or 5% from yesterday`s close.
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