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Johannesburg - AltX-listed electronics company Ellies expects corporate demand for power generation to boost the company's growth in revenue and profitability.
This is despite a drop in consumer demand for power generators after the electricity crisis tapered off. Generator sales contributed 5% of revenue for the six months to end-October 2008.
The market was not enamoured by the results, with Ellies shares falling 7.4% to 125c by 11:00 on Tuesday morning.
Ellies bought Megatron Federal - which specialises in the fields of power generation, transmission and distribution - for R180m on May 1 2008, causing a change in the year ended from February to April and thus resulting in the prior six months interim period to end-August 2008 incorporating only four months of trading results.
Earnings per share for the six months to end-October rose by 63% to 18.93c when compared to the same period in 2007. Revenue grew by 65% to R544m.
Ellies' management attributed this to "continued demand in satellite sales and consistent demand for the electrical and consumable ranges".
Ellies' gross profit margin reduced slightly, from 12.7% in 2007 to 12% in 2008. The company attributed this to rising transport costs caused by high fuel prices, increased interest rates and a very weak rand.
The company had a negative cash balance of R43.6m for the six months ended October 31 2008, down from a positive position of R76.6m on August 31 2007.
- Fin24.com
