subscribe: Daily Newsletter

 

Pinnacle expects higher revenue, profits

0 comments

Pinnacle Holdings has released a trading statement regarding better than expected revenue and earnings growth for the six months ended 31 December 2015.
Revenue is expected to increase by between 17% and 20% to about R4,25-billion or R4,35-billion, while headline earnings will grow between 16% and 20% to between R145-million and R150-million.
Earnings per share and headline earnings per share will both increase to between 91 cents and 85 cents.
Growth in revenue for the period came mainly from the group’s infrastructural products and new technologies.
Gross margins have continued to be under pressure and, as a percentage of revenue, are expected to be approximately 1,5% lower than the comparative period, mainly as a result of competitive pressures and product mix as the group continues its progress into large technology projects which typically carry lower margins.
Cost management saw increased efficiencies resulting in operating expenses, as a percentage of revenue, decreasing by approximately 1,5% when measured against the prior period, compensating for the drop in margin.
During the period, Pinnacle increased its investment in Datacentrix Holdings from 34,9% to 46% through the issue of shares in Pinnacle, which resulted in a small dilution in HEPS. However, the board is confident that the investment will continue to enhance returns in the future. Since the end of December 2015, Pinnacle has further increased its investment in Datacentrix to 55,3%.