Micromega earnings up 87%

2012-07-26 12:12

Johannesburg – Micromega Holdings [JSE:MMG] has reported an 87% rise in headline earnings per share (EPS) to 25.72 cents for the six months ended June 2012 from 13.72c a year ago.

Attributable EPS were up 106% to 30.32c.

Revenue was 7% higher at R385m‚ while profit for the period grew to R29.495m from R14.745m.

CEO Greg Morris said the balance sheet continued to strengthen‚ with the net asset value per share rising 9% to 337.82c.

"Operating margins have improved significantly over the period‚ from 5% to 10%. This is primarily attributed to our exit from the automotive sector and our renewed focus on our traditional service-based businesses.

"We have invested significantly in recent years to ensure we have both the capacity and competence to deliver sustained earnings growth. We are now seeingthe benefit of this investment strategy."

Looking ahead‚ the group said Nosa‚ which provides occupational health‚ safety and environmental risk management services‚ remained a demand-driven business.

"Our ability to meet this demand is governed by our access to skills and resources.

"We have a continuous skills development and recruitment programme in place but nevertheless believe it will take up to five years before we can fully deliver on even the current demand for our services.

"This is a direct reflection on the importance that the government and corporate SA are placing on occupational health and safety in the workplace and bodes well for future earnings growth‚" it said.

The group's technology businesses are performing in line with the earnings forecast for this year.

The cloud computing service has gained some promising traction in the first half year and the group was confident it would become an important contributor to earnings in the medium term.

"Our inter-dealer broking business and our human resources solutions business are both expected to achieve their forecast earnings for 2012.

"Both businesses have focused on expanding their services into the African continent and this should assist in achieving sustainable growth beyond this year‚" it said.

The restructuring of the group to dispose of noncore businesses was completed with the sale of Deltec in the first half of this year.

"We now have a robust structure that incorporates a portfolio of businesses we can confidently build upon‚" Morris said.

The strong cash position reported for the first half has since been boosted further by receipt of the proceeds from the Deltec sale.

"The group is robust in structure‚ clients are satisfied with service delivery‚ and we have cohesion and a common strategy driving product development and underpinning market penetration‚" Morris said.

"The second half of the year has traditionally delivered higher levels of growth than the first half. We expect no difference this year.

"We are already gaining some visibility into the next financial year and we are cautiously optimistic about our prospects for 2013‚" he said.