ISA sees decline in profits
ISA Holdings announced late on Friday a modest rise in revenue for the year ended February 2012 to R64.226 million, from R62.064 million.
Profit before other income and expenses declined to R30.448 million, from R30.567 million before.
ISA provides innovative information security solutions that enable companies to better manage the confidentiality, integrity and availability of their IT resources.
Earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 2% to R 19.3 million and profits declined by 5% to R12.9 million.
The group reported diluted headline earnings per share of 7.0 cents, from 7.2 cents in 2011, and a capital distribution paid per share of 1.0 cents, from 1.7 cents.
“We have delivered a satisfactory result for the financial year ending 29 February 2012; this, in light of the increasingly challenging landscape in which we operate. The composition of our revenue continues to be a focus area for management, specifically addressing recurring revenues levels and higher profit service sales,” it said.
The group pointed to a gross profit margin on the sale of goods and services of 48%, compared to last year’s 52%, “largely due to a contraction of service derived revenues, when viewed against the previous reporting period’s FIFA World Cup high. Product margin remains under pressure year to year,” it said.
ISA said that the positive momentum of its internally developed MSSRegistered Pulse security infrastructure monitoring and management products continued through the period, and has given management the confidence needed to increase their investment in their development initiatives. “The revenue received from these products has already exceeded the cost of the development.”
During the period under review, distributions totalling 7.2 cents per share were declared and paid to all shareholders on the 18th of July 2011, comprising of an ordinary dividend of 6.2 cents per share and a capital distribution of 1.0 cent per share.
Looking ahead, the group said that it believes the economic recovery is underway, albeit over a longer timeframe than was initially anticipated.
“We are of the view that an essential part of our longer term growth strategy is an investment in organic growth, where we can build and enhance our existing capabilities.
“The key drivers of the IT security market remain robust and we are well positioned to benefit from this. The continued evolution of threats and attacks against organisations, together with the increased regulatory and legislative compliance requirements, continue to elevate the importance of IT security within organisations,” it continued.
“In addition, IT security remains a cornerstone for business enablement, which we believe should create opportunities for us in other areas of the ICT market, as customers are giving more priority to their need for a secure converged information and communication framework,” ISA finished.
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