JSE-listed Paracon Holdings achieved a “solid performance” for the year ended 30 September, with revenue up 16%, to R916.3 million, and EBITDA increasing by 17%, to R85.5 million.
Operating margins increased slightly from the previous year, from 9.2% to 9.3%.
Cash generated from operations increasing by 25%, to R100 million, equating to a 118% cash conversion ratio.
“Continued focus on accounts receivable resulted in debtors' days remaining consistent with the previous year's 27 days. Cash flows from financing activities of R80.3 million is made up of the R18.7 million net capital distribution paid to shareholders in March 2007, the payment of R49.3 million for the WDB specific share repurchase and R12.3 million in terms of a general share repurchase,” the company says in a JSE statement.
The company's headline earnings and earnings per share for 30 September 2008 were affected by the once-off and first-time secondary tax on companies (STC) charges arising from the specific share repurchase and cancellation of shares.
In terms of the specific share repurchase, Paracon acquired 36 300 000 Paracon ordinary shares, at 135c per share, from black empowerment shareholder WDB Investment Holdings. The WDB specific share repurchase cost amounted to R49.3 million, with an additional R4.9 million STC charge thereon.
“The demand for specialist skills in SA continued to boost growth for the year in Paracon Resourcing and Paracon Business Solutions. Paracon Resourcing, comprising IT Contracting and Permanent Recruitment Services, performed commendably despite the ongoing scarcity of ICT skills in SA and the general slowdown in the local economy,” the company noted.
It adds that the division continued to account for the majority of group revenue and operating profit, with revenue of R782.9 million, increasing 14% from the previous year, and EBITDA of R90.9 million, up 18% year-on-year.
“Paracon Resourcing's performance reflected the benefit of strict focus on building a leading ICT resourcing and talent management business for sustainable growth and profitability. The performance from Permanent Recruitment Services was not as strong as expected in the second half of the year; however, IT Contracting continued to perform steadily,” the company adds.
Paracon Business Solutions, comprising Paracon Professional Services, Paracon Networking and Paracon Solutions, posted strong results for the year, with revenue up by 30%, to R133.5 million and EBITDA increasing by 17%, to R18.5 million.
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