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DigiCore: Worst over

Mar 09 2010 09:28

Company Data

Digicore Holdings Ltd [JSE : DGC]

Last traded R2.90
Change R0.00
% Change 0.00%
Cumulative volume 252,059
Market cap R718.24m

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Johannesburg - DigiCore Holdings [JSE:DGC] , which has grown from just commercial vehicle fleet management to include a successful stolen vehicle recovery (SVR) business, witnessed a 57% decline in fully diluted headline earnings per share from 24.7c to 10.7c for the six months ended December.

Group revenue decreased from R288m for the six months ended December 31 2008 to R249m for the review period.

The group, which has recently added personal tracking to its portfolio of products, the launch of which will coincide with the Fifa World Cup in June 2010 for the convenience and safety of visitors to South Africa, said that gross margins have been under pressure mainly due to growth in lower-margin SVR units and a severe decline in the traditionally higher-margin fleet management products.

"Pricing pressures, particularly the export market, have also affected gross margins, as to be expected during economic downturns," it said.

Net profit after tax reduced by 59% from R56.7m (2008) to R22.8m for the interim period.

"As our overheads are relatively fixed, a reduction in turnover has a severe effect; equally, when turnover rises, net profit after tax will again grow exponentially," DigiCore said.

Looking ahead, the group said that all indications are that the group has weathered the worst, with the lowest sales recorded during April to August 2009.

"Enquiries and sales have since steadily increased and at the time of writing this release (March 2010) we are confident of a gradual recovery in our markets," it added.

"Contrary to some of our competitors, particularly in Europe, we have not retrenched skilled labour and are well placed to capitalise on the upturn in the world economy. We are equally well placed for a number of local and international tenders and confident that we have also seen the start of increased spending by larger corporates and utilities.

"DigiCore's management team is cautiously optimistic that our key markets will return to reasonably improved profitability in the second half of our financial year," DigiCore stated.

- I-Net Bridge

 
 
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