Faritec`s earnings leap

By Iain Scott, ITWeb group consulting editor

Johannesburg, 15 Jun 2006

Faritec expects its headline earnings per share for the year to end-June to be between 9.8c and 10.5c - at least 444% up on the previous year`s 1.8c headline earnings per share.

Last year`s earnings per share amounted to 3.8c. The 2005 financial results have been restated in terms of international financial reporting standards.

The market reacted positively to yesterday`s trading update, with the share gaining 10c or 13.9% to close at 82c.

This is the first update since CEO Simon Tomlinson said at the interim stage that while the second half of the year was positive, the group did not expect to repeat the results of the first half.

This, Tomlinson said, was not due to an expected slowdown in the second half, but rather to an exceptional performance in the first half of the year.

The six months to December 2005 saw headline earnings per share rise to 6.7c from 0.1c for the same period a year before, while basic earnings per share climbed to 6.6c from 3.2c previously.

Operating expenses

The group`s directors attribute the full-year performance to better trading margins and continued control of operating expenses.

At the same time, the group`s new strategy, transformation and investments are showing the expected returns, they add.

The results exclude the performance of Enterprise Connection, as legal action between Enterprise Connection and a third party has delayed the implementation of Faritec`s R54.1 million acquisition of the company.

Directors now expect to be able to close that deal on 30 June. The full-year results are to be published on 13 September.

The share was untraded this morning.