Poynting Antennas is heading to the JSE's AltX tomorrow with a forecast of a 104.9% increase in its after-tax profit for the 2009 financial year.
The group's prospectus shows the company is expecting after-tax profit of R19.01 million for the year to end-June 2009, on revenue of R102.1 million. This compares with a forecast R9.28 million after-tax profit for the 2008 financial year, on R58.08 million revenue.
CEO Andre Fourie says the 2008 profit forecast was drawn up without any input from the listing, and the listing has caused some additional and unplanned costs.
"Our figures need to be audited still, but since the forecast was refined about two months before year-end, it is expected to be realised with a high level of confidence," he says.
Neither the revenue nor the profit are due to acquisitions and are totally organic. "The funds raised during listing are certainly necessary to achieve part of the performance in 2009. Our main benefits from the listing investment will only be realised in FY 2010, where we expect similarly healthy organic growth from developments the previous year."
He says without the listing funds, 2009 profit would have been about R4 million lower and turnover lower by about R14 million.
The figures represent a significant leap from the 2007 financial year, when Poynting recorded an after-tax profit of R1.51 million, with revenue of R43.93 million.
Fourie says before the start of 2008, Poynting decided to reduce its turnover growth. "We made sure we structured the company to achieve decent net profit out of the turnover and you can see that with 30% growth in turnover, we are achieving 500% increase in profit.
"2008 FY profit after tax should be about 16% of turnover and we expect this to go to around 19% in 2009."
Funding growth
The purpose of the listing is to raise funds to finance anticipated growth in working capital needed to meet the requirements of the markets in which Poynting operates.
The company also hopes to fund future growth, which requires the development of new sales channels, and the expansion of existing channels, as well as fund the development of new products.
"The move will also allow for additional investment in research and development infrastructure, increase production capacity and enhance Poynting's company profile and brand recognition," says the company.
Poynting has virtually zero to negative net cash holdings before raising listing finance.
The private placement, in which 20 million shares were offered at 100c a share, was slightly oversubscribed and the company raised R20 million.
Poynting opened its doors in 1990, and operates in the telecommunications and defence industries. It designs and manufactures wireless and cellular end-user antenna applications and custom-made antennas.
It says it is experiencing rapid growth in its export business, resulting in increased demand for products. Poynting says its business aim is to increase market share in growing markets through product diversification using low-cost manufacturing technologies.
The company says it will continue to be responsive to new market requirements, and broaden its global footprint through expansion of its distribution capabilities. Poynting directors say the company has exciting prospects, both locally and internationally.
"The most significant market driver for Poynting is the increased use of wireless technologies for broadband Internet connections," it says.
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Poynting heads for AltX
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