IT services company Vesta Technology Holdings has reported headline earnings of R521 000 for the year to August, 70.7% down on the R1.78 million achieved last year.
Revenue for the period slipped from R18.49 million to R16.17 million - a decrease of 12.6%. Pre-tax profit fell from R638 000 to R382 000 and the group incurred a net loss of R31 000, compared with a previous profit of R1.17 million.
"Vesta`s results reflect the difficult trading conditions experienced during the year," says CEO Frederick Morrison.
"There was a substantial decrease in revenues from hardware and software sales, which led to a corresponding decrease in gross profit." He adds that revenue from services remained stable during the year.
"Apart from the decrease in revenue, the earnings of the group are lower than August 2003 as a result of lower foreign exchange profits on a loan - R176 032 compared to R818 882 in 2003 - and a taxation charge in the current year where there was a taxation credit in August 2003."
The WebActive Learner Management System was impaired by a further R551 798, representing 12.9% of the original development cost. Morrison says this impairment reduces the value in use to nil.
The balance sheet shows an improvement in Vesta`s liquidity position, with a current ratio of 1.41 on 31 August, compared with 0.85 at the previous year-end. Cash and cash equivalents amounted to R95 000, up from R71 000 previously.
"Vesta is in the process of establishing data processing capabilities which should provide returns in the latter part of 2005," Morrison says.
"Vesta will continue to strive for sustainable long-term growth with annuity revenue streams. Focus will still be on expansion of existing operational areas, including the local council market where the company is beginning to provide products and services."
Related story:
Vesta takes a knock
Share
