NewswireToday - /newswire/ -
Centurion, Pretoria, South Africa, 2006/09/05 - DigiCore Holdings Ltd, the vehicle tracking solutions provider, has posted impressive results for the fifth consecutive year. The company has achieved growth in attributable earning in excess of 57% on top of the 80% growth in the previous year.
DigiCore Holdings Limited
Annual Results for the year ended 30 June 2006
- Turnover up by 28 per cent from R253 million to R323 million;
- Operating profit up by 64 per cent from R57 million to R94 million;
- Unit sales of the C-track vehicle tracking system increased by 52 per cent;
- Within Europe, turnover has grown 81 per cent, contributing R6.5 million to consolidated profit.
The board is extremely proud to announce great performance for the fifth consecutive year. To achieve in excess of 57% growth in attributable earnings on top of the 80% of our previous year is a remarkable achievement from our management and staff. This was achieved simultaneously with substantial start up expenses being incurred while establishing our new C-track Secure stolen vehicle recovery (SVR) division.
Turnover grew by 28 % from R253 million to R323 million. Unit sales increased by 52% over the year assisting us to increase operating profit by 64% from R 57 million in 2005 to R94 million for the current year.
Earnings per share increased by 53% to 32 cents per share from 21 cents per share in the previous year. Headline earnings per share increased from 21 cents (2005) to 32 cents per share. These calculations are based on a total weighted average of 198,572 million ordinary shares in issue. The difference between the total number of shares in issue and the weighted average number of shares in issue relates to treasury shares held in the share trust.
Cash generated by operations grew from R29 million to R74 million. Cash on hand increased by R13 million to R61 million. This is after the payment of dividends, reduction in foreign borrowings, investment in the United Kingdom subsidiary and additional marketing spent of R9 million during this year. The group will continue to manage its cash resources with prudence.
Trade receivables increased to R91 million due to exceptionally high sales in June 2006. This balance has subsequently been reduced to R 60 million with the payment of the trade receivables and cash in bank had increased by a similar amount by the end of July 2006.
Inventory holding as a percentage of revenue is now at an acceptable level compared with high inventory holding experienced at the end of the previous year end.
Our 51% European subsidiary has grown turnover 81 %, contributing R6,5 million to our consolidated profit for the period, while at the same time reducing foreign loans. The total European strategy is on track as per the original business plan and expectations.
During the year we have invested into our United Kingdom distributor in purchasing a 50.1% shareholding in the business. This has enabled the business to be poised for rapid expansion and growth.
The ongoing building and maintaining of customer relationships and the bedding down of new technology in the previous year is starting to show good results. Our technology allows customers to decrease their monthly operating costs, which helped grow turnover to R323 million.
This year has seen the full scale launch of our stolen vehicle recovery C-track Secure product. Since January 2006 we have deployed a full team to market and install this product in a separate division. Although we have not fully reached all our goals, the division broke even in the last quarter and is set to contribute towards our profitability in the future.
An advertising campaign was launched on television and on regional radio stations which gave us our first exposure to the man in the street. We have gained some valuable experience over the period and trust that we will see the benefits in years to come.
In South Africa we have improved our customer service strategy by increasing and training our staff to keep up with customer demands and technological challenges and will continue to do so with vigor.
The international business has been growing through our well-established distribution channels. We have signed distribution contracts with six new companies across Europe, Middle East and Asia. The intensified operational cooperation between DigiCore Europe BV and C-track Benelux BV has lead to sharing of expertise that greatly improved sales and marketing into the other European countries.
The European subsidiary has successfully expanded our footprint into Finland, Central France, Italy as well as the Southern part of Germany where DigiCore Holdings (digicore.co.za) will support the sales and marketing effort. Our ultimate goal is to build a distribution network to service Europe holistically.
Our investment in the UK has enabled the company to grow the team and move into more suitable offices and we trust that the benefits will be forthcoming during next year.
The Pakistan operation has again met our expectations with good growth in unit sales and has strengthened its number one position in the area.
The technology team has implemented an information “Gateway” or “Hub” making it possible to service our customers better and cut their cost through the implementation of GPRS in transferring more data at a reduced tariff from the cellular network providers. At the same time this increased our customer involvement thus creating another annuity based revenue stream.
Optimising the hardware designs also assisted in reduced manufacturing cost, thus protecting our margins which has resulted in not having to increase prices to our valued customers. The Development Team has been further strengthened during the year and a new and dedicated Product Support division was established to provide dedicated training and technical support to the expanding international distributors.
BLACK ECONOMIC EMPOWERMENT (BEE)
An innovative BEE transaction in our South Africa Fleet Management business was concluded. This deal will not only give us the required equity credentials, but will add real value to this business in future with the expertise that our partners bring. The Group also appointed our first black executive director in this newly formed subsidiary, working full time to achieve our goals set for the coming years. Our BEE partners will in particular add value to our finance, legal, human resources and sales and marketing divisions. The Group remains committed to grow all the other pillars of Broad Based Black Economic empowerment to ensure a truly South African business.
A continuation in development of world class software and hardware will ensure we meet the basic needs of every vehicle owner on the Globe and will remain one of our major goals. We will continue to dominate the markets we select to operate in, through this world class technology.
Further accelerated International expansion will be part of our strategy going forward. It is our intention to strengthen and grow this division to identify new markets and distributors, as well as to providing support to ensure that they achieve success even quicker than in the past.
We have embarked on entering the SVR market and will continue to build on the foundations laid during the reporting period. Several agreements have been entered into and the required approvals achieved to enable us to make inroads into this market.
This will allow for the future growth and long-term sustainability of the group.
In line with the company policy, the board has declared a final dividend of 6 cents (2005: 4 cents) per share. This is after the company paid an interim dividend of 4 cents (2 cents) per share in April 2006.