Pinnacle Holdings has increased its revenue by 1,1% to R3,2-billion, according to unaudited interim results for the six months ended 31 December 2013.
The group reported EBITDA up 1,7% to R232-million, net profit after tax (NPAT) up 9% to R162-million and headline earnings per share (HEPS) up 1,7% to 95.4 cents.
Gross profit increased by 6% on improved margins of 16,3%.
Operating expenses increased by 9,1% to leave operating income up by only 1,7%, which included the reclassification of the fair value adjustment on the de-recognition of the investment in Datacentrix from a listed share to an equity accounted investment.
The acquisition of the 34,99% share in Datacentrix affected interest paid by approximately R4,6-million, and the income calculated in accordance with IAS 28 meant that this investment shows a breakeven position at this stage.
Group borrowing costs decreased as a result of the growing net contribution of Centrafin’s financial assets. There was a saving on the tax rate due to the utilisation of certain tax losses. The net result was that the 1% revenue growth was turned into a healthier increase in post-tax earnings of 9%.
The Distribution division increased revenue by 2% with net profit after tax also up by 2%. Infrasol, the IT Projects and Services division, increased turnover by 39% and net profit after tax by 29%.
Centrafin increased its revenue by 65% and achieved net profit after tax growth of 67%.
“The overall economy faces challenging times ahead, with the consumer becoming more financially constrained than ever and the resources sector, bedevilled by labour and demand issues,” the group states in its SENS report.
“Nonetheless, the IT sector has remained resilient in the face of these and other economic challenges and it is envisaged that it will continue to remain reasonably so.
“It is anticipated that the investment into Datacentrix will deliver the group enhanced returns in the years ahead as we explore synergies and enhancements.
“We are moving into the period of highest activity during the year for the IT industry and the Distribution division is well placed to take advantage of all of these opportunities.
“The efforts of the group to expand its offerings into the rest of Africa is paying off, with year on year revenue growth into the region of 46%.
“Infrasol is expanding its services offering and is seeing increased traction, while Centrafin, Pinnacle’s finance subsidiary, continues to enable transactions to take place within the group.”