Although SecureData continued to make significant progress toward achieving its vision of becoming a significant provider of information risk management (IRM) solutions and services in all its geographical areas of operation during the six months ended 31 January 2009.

However, the period under review was marred by continuing earnings weakness in the SecureData Africa division and underperformance by the operations in the UK.
Group revenue increased by 107% to R232,1-million. Group EBITDA declined 11% to R19,3-million over the prior half year, and net borrowings at 31 January 2009 stood at R60,6-million, down from R63,9-million at the prior year end.
The rand weakened in the six months to 31 January 2009 relative to pound sterling and the group achieved an exchange profit of R1,4-million on its intra group loans. The amortisation of intangible assets of all acquired companies resulted in a charge during the period of R8,9-million.
The combined negative effect of these non-cash, non-operational items on EPS is 2,4 cents. An adjusted EPS calculation that ignores these non-cash items but includes cash expenses such as interest results in an adjusted EPS of 3,1 cents per share.
Working capital management improved significantly with inventories halving from R6,1-million to R2,9-million and debtors days reducing to 61 days from 73 days at the prior year end. Management continues to place particular emphasis on working capital management.
SecureData Africa saw a decline in margins during the latter part of the 2008 financial year. The decline was primarily attributable to a less than optimum product mix and an increase in operating costs.
During the period under review the company took significant steps to redress this under performance including a senior management restructure, the appointment of Tony Nutter as MD, a detailed analysis of operating expenses and a complete product portfolio review. The effect of these changes was beginning to be realised during the reporting period.
Overall, the group continues to gain market share in the markets in which it trades, and has a significant IRM presence in the Europe/Africa region.
It continues to be cash generative, plans to restore its operating margins are being implemented, and working capital management has improved.
The IRM market has historically proved to be quite resilient during downturns in the economic cycle and although it remains difficult to predict to what extent current financial market turmoil will impact buyer activity, the board of directors believes the group is well positioned to take advantage of attractive opportunities within the IRM sector well into the future.