Faritec cracks the billion mark

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 11 Sep 2008

JSE-listed Faritec Holdings has reported total revenue of R1 billion for the first time.

Faritec had initially hoped to reach R1 billion revenue in its 2006 financial year. However, the difficulties of integrating the large acquisitions of Enterprise Connection and Lechabile Storage Solutions ultimately resulted in the company missing that goal. Instead, the company posted revenue of R858 million.

"From the systems to the controls, the acquisitions placed high stress on the business. It has taken us a year to get on top of that," says Simon Tomlinson, Faritec CEO. He adds that the results released yesterday, for the year ended June 2008, show the company has regained its momentum.

<B>Fast figures:</B>

* Revenue grew 21%, to R1.041 billion, compared to R858 million for the year ended June 2007.
* Earnings before interest, taxation, depreciation and amortisation increased by 109%, from R26.5 million in 2007, to R55.5 million.
* Net profit before taxation increased by 84%, to R37.4 million.
* Profit attributable to ordinary shareholders grew by 75%, from R 16.5 million in 2006, to R28.9 million.
* Headline earnings per share increased by 27%, from 8.9c in 2007, to 11.3c in 2008.
* Earnings per share are up by 33%, from 8.5c in 2007, to 11.3c.
* Cash on hand is R18.7 million.

In the company's interim results, reported in February, it cautioned shareholders that the electricity crisis and unstable international markets could well have an effect on the business.

Tomlinson says the company is now more confident in its ability to adapt to the eco-political environment.

"The company is well placed to deal with the global economic downturn. While the local political situation and the global economic environment are unclear, we are pretty comfortable in our position. We believe we are and will grow in line with the market."

However, he says what the business delivers on a macro level will still depend on the political and economic environments that affect it.

The figures

Tomlinson says Faritec put much effort into strategically growing its software and services business units, which is evident in the results. The software business reported 50% growth and services produced a 25% increase.

The company aims to develop the software business to the point where revenue exceeds that of the hardware unit.

Tomlinson says Faritec's risk profile has improved significantly as the business has diversified, and the company's efforts in raising its profile and marketing its offerings to the public sector are showing good results.