The ERP.com share lost ground yesterday despite the group reporting annual results that were better than indicated by a trading update at the beginning of August.
Turnover for the year to July rose by 29% to R172.02 million from R133.06 million previously, while earnings before interest, tax, depreciation and amortisation was up 14% from R32.58 million to R37.12 million.
Pre-tax profit increased 11% to R39.19 million from R35.44 million and the group`s net profit was 10% higher at R25.98 million, compared with R23.69 million previously.
Earnings and headline earnings per share were up 9.2% from 14.2c to 15.5c. The group has declared a dividend of 4.7c a share and a special dividend of 3.3c a share, bringing the total dividend to 8c a share.
The group said in the August update that turnover and headline earnings would be at least 20% and 7% up respectively. Because the disclosure coincided with the announcement of then CEO Peter Forsyth`s resignation, it was widely believed the resignation triggered a subsequent fall in the share price.
However, analysts said later that the market was disappointed with the earnings guidance. However, Forsyth commented that the update was misunderstood.
"I don`t think the market realised that what we were saying was that it would be no less than that, so people think that will be the figure," he said.
New CEO Dean Brazier says the board believes the group will show reasonable growth in the current financial year.
"Historically, however, the first six-month trading period is somewhat weaker than the second and this fact, coupled with the ongoing investment requirements, suggest that the first six months of the financial year will be challenging."
The share, which closed 6c or 3.7% down at 155c on the JSE yesterday, was trading unchanged early this morning.
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