Pinnacle Technology Holdings is “considering its legal position” in relation to the bribery charges that were brought against its executive director Takalani Tshivhase and later withdrawn.
The company today announced its results for the year ended 30 June 2014, reporting a revenue increase of 8% to R7,1-billion, but a fall in headline earnings per share (HEPS) of 19% for the year ended 30 June 2014.
“This year would have to rank as one of the most challenging in the 21-year history of the company, with the attempted bribery allegations against one of our long serving executive directors, Takalani Tshivhase, in March 2014 being the single most significant issue,” the company reports.
“These allegations have now been retracted, and the charges, which led to the arrest, are in the process of being withdrawn. However, the incident caused our stakeholders a great deal of concern and resulted in a steep decline in the share price.
“As advised to our stakeholders in the various SENS announcements, the company, on the evidence available to it, was of the view that there was no reason to doubt the veracity of Tshivhase’s denial of the allegations.
“Whilst, therefore, the company is greatly aggrieved that these unfounded allegations were made against one of its directors, which caused reputational harm to the Ccmpany, it draws some comfort from the fact that the senior directorate of the NPA, on reviewing the matter and assessing the reliability of the witnesses concerned, determined that the allegations were unsustainable and that the charges should be withdrawn.
“Whilst the company is presently considering its legal position with regard to the matter, on a positive note, the company is grateful for the ongoing and unflinching support which it received from all its major suppliers and customers.”
Group revenue increased by 8% to R7,1-billion, but gross profit decreased by 1% on margins that decreased to 14,4% (2013: 15,6%).
Towards the end of the year, the Ccmpany decided to discount certain slow moving inventory that would have become technologically obsolete. This resulted in substantial write-downs but helped ensure that the company starts the new year with inventory that is better priced and technologically up to date.
In addition, margins decreased during the last six months due to certain large deals that were done at low margins and due to competitive pressures.
Operating expenses increased by 15% which resulted in EBITDA reducing by 18%.
The distribution division increased revenue by 8% although net profit after tax decreased by 30%. Revenue in the second half of the year grew by 14%, albeit at lower margins, indicating the investment into new focus areas, such as the Advanced Technologies unit, is beginning to bear fruit.
Infrasol, the IT projects and services division, showed a marginal revenue increase of 5% for the year. Profit after tax in this division increased by 11%.
Centrafin recorded revenue growth of 45% and achieved a net profit after tax growth of 63%. The book continues to grow strongly and now stands at R382-million from R269-million a year ago.