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Pinnacle scales new heights

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Pinnacle has reported sterling growth for the year ended 30 June 2008, with revenue growing 45% to R2,5-billion and operating profit up 39% to R151-million.

Fully-diluted HEPS increased by 36% to 57,2 cents per share, with the proposed dividend up by 20% to 12 cents per share.
According to the company, diversification strategies continue to benefit it, as the Proline and internationally-branded hardware, software, networking, infrastructure and support services ranges continued to expand during the year.
During the year, Pinnacle acquired Tri Continental Distribution (TriCon), which introduced IBM and Lenovo as tier one server and mobile offerings to Pinnacle Micro.
In addition, agreements were entered into to distribute Sony, Lexmark and Hewlett Packard products in South and southern Africa, of which the full impact will only be felt in the 2009 financial year.
During the year, volume growth mandated additional warehouse and office space be leased in Cape Town, Bloemfontein, Midrand and Nelspruit. A sales office was established in East London and warehouse space in Port Elizabeth is being expanded. Additional sales offices have been tabled for consideration in outlying business centres.
According to the statement, the government line of business showed innovation with the successful roll-out of Phase 6 of Gauteng Online. The model developed was applied in the other provinces with the execution of geographically distributed government funded education projects. Channel branches in the regions successfully rolled out local government initiatives and, in doing so, secured the right to compete for future roll-outs.
The CCTV line of business stabilised its product offering and improved its technical solution and support skills with the appointment of experienced staff to offer value added solutions to clientele.
Mass retail exceeded budget expectations as the product range offered to its clientele was expanded to include notebooks, printers and peripherals.
Workgroup experienced good demand for infrastructure software and strong spending by government.
Technologies that drive down IT expenditure, such as virtualisation, showed increased demand, whilst storage expenditure continued to grow with the continued proliferation of data.
In the Microsoft space, Workgroup sustained its growth by focusing on increasing overall Microsoft product deployment within medium-sized corporates and small businesses. It has also successfully grown the market with Sun Microsystems in South Africa.
DataNet relocated to secure modern premises in Midrand, reducing risk and generating positive feedback from staff and customers alike. The relocation, combined with the turnaround strategies implemented over the past 18 months, contributed to a profit of R5,6-million being posted by DataNet.
Gross profit as a percentage of sales dropped from 16,1% to 15,2%. This was as a result of the introduction of TriCon and other international branded products.