Prism grows earnings and declares maiden dividend

* Revenues up 14%
* Headline earnings per share up 21.7%
* R71 million cash generated from operations
* Maiden dividend of 2.3 cents per share declared

Trusted transactions company, Prism Holdings announced a year of enhanced profitability and cash generation.

CEO Alvin Els describes Prism`s results as "very satisfactory, particularly when one considers that 55% of our revenue was denominated in US dollars". Despite the strengthening of the rand to an average R6.18 to the US dollar during the review period, against R6.85 in the previous year, Prism`s revenues grew by 14% in rand terms and 27% in dollar terms.

Headline earnings increased by 11% from R26.9 million to R29.8 million, and the corresponding headline earnings per share increased by 21.7% from 4.6c to 5.6c.

The group invested a total of R70 million during the year, which was utilised for plant expansions and upgrades to computer systems (R22 million), facilitation funding for the Mineworkers Investment Company (MIC) BEE transaction (R22 million) and purchases by the Staff Trust of Prism shares to cover outstanding share options granted (R26 million). The group`s share trust acquired 73 million Prism shares during the year at an average price of 35c per share.

Notwithstanding these significant investments, the group ended the year with cash balances of R63 million compared to R60 million at the commencement of the year under review.

Els believes the allocation of funds towards new SIM card manufacturing equipment was well spent. The volume of Prism`s SIM sales rose - directly through local manufacture and indirectly through SIM card licensing - by 68% in the review period in a global market that experienced approximately 20% growth. As a result, Prism now holds some 5% of the global SIM market.

Prism`s "Voucherless Top-Up" (VTU) solution, which facilitates cellular phone based prepaid airtime vending and which won the company a coveted Technology Top 100 award during the year, is realising its commercial potential. Network operators in Africa have expressed interest in the solutions and several systems have already been implemented.

Focus within the Payment Solutions Business Unit has been aimed at completing Europay, MasterCard and Visa (EMV) card acceptance infrastructure implementations started during 2004 for major retailers and banks.

Transactional Security Products and Software division in which sales grew by 33%; and Prism`s Services arm (EasyPay) has continued to show growth within a buoyant retail environment and consistent growth in electronic bill payments via the EasyPay service. Sustained profitability, a stable business model and disciplined working capital management led to strong cash generation and as a result the board declared a maiden dividend for the year of 2.3c.

Looking to the future, Els says Prism will continue on a path of organic growth and will continue to seek ways in which to expand its sales channels globally.

"Provided the rand remains at present levels, we are confident that prospects for earnings per share growth for the year ahead is favourable," he concludes.