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20 March 2001
Pinnacle changes model after earnings drop
BY
IAIN SCOTT
[
20 March 2001
] -
IT products and services supplier Pinnacle Technology Holdings, which has reported what it calls a “disappointing” 27% drop in operating profit for its interim period, plans to change its income mix.
The JSE-listed company blames its woes on various factors, including the “negative effect of the Y2K syndrome on IT companies” and the worldwide decline in demand for IT products and services.
Other factors are strong competition between IT companies and the direct impact on margins, and the weakening of the rand against foreign currencies.
Operating income before depreciation fell to R5.22 million in the six months to end-December 2000, compared with R7.57 million in the same period of 1999. Revenue was flat at R156.74 million (1999: R156.17 million).
Net profit after tax declined to R1.39 million (R3.13 million) while attributable earnings of R1.36 million compared with R2.96 million previously.
Headline earnings fell to 0.92c (1.76c) per share. The company's net asset value was 43.43c (54.43c) per share at the end of the period.
“The group has identified IT outsourcing, services, enterprise resource planning and enterprise retail solutions as future growth areas,” says Pinnacle CEO Arnold Fourie.
He adds that the long-term strategy encompasses a change of income mix from a largely hardware distribution base to a mixture of distribution and the services identified as growth areas.
“Some headway has already been made in this regard and various other opportunities have been identified for exploration.”
The Pinnacle share ended unchanged at 6c on the JSE yesterday, down from 18c a year ago.
The JSE-listed company blames its woes on various factors, including the “negative effect of the Y2K syndrome on IT companies” and the worldwide decline in demand for IT products and services.
Other factors are strong competition between IT companies and the direct impact on margins, and the weakening of the rand against foreign currencies.
Operating income before depreciation fell to R5.22 million in the six months to end-December 2000, compared with R7.57 million in the same period of 1999. Revenue was flat at R156.74 million (1999: R156.17 million).
Net profit after tax declined to R1.39 million (R3.13 million) while attributable earnings of R1.36 million compared with R2.96 million previously.
Headline earnings fell to 0.92c (1.76c) per share. The company's net asset value was 43.43c (54.43c) per share at the end of the period.
“The group has identified IT outsourcing, services, enterprise resource planning and enterprise retail solutions as future growth areas,” says Pinnacle CEO Arnold Fourie.
He adds that the long-term strategy encompasses a change of income mix from a largely hardware distribution base to a mixture of distribution and the services identified as growth areas.
“Some headway has already been made in this regard and various other opportunities have been identified for exploration.”
The Pinnacle share ended unchanged at 6c on the JSE yesterday, down from 18c a year ago.
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