FoneWorks sees revenue slip

Listed IT company, FoneWorx Holdings has reported a decline in revenue, but a rise in profits for the six months ended December 2012.

FoneWorx and its subsidiaries provide interactive telecommunications, switching and business services.

The company reported that its revenues for the reporting period slipped 9% to R47.897 million, compared to the R52.657 million reprted in 2012.

However, despite this, profits at the company were higher.

Profit before tax was up 7% to R17.2 million, from R16.104 million in 2012. After tax, FoneWork brought in R12.21 million in profits – up 14% from R10.7 million in 2012.

FoneWorx results
FoneWorx results (Six months ended December 2012)

FoneWorx attributed the rise in profits to a business focus on revenue and a move to practices that required less human intervention in favour of automated or mechanised delivery platforms.

“This decision has reduced turnover and costs in favour of enhanced profitability and improved cash flow,” the company said.

FoneWorx said it also managed to reduce staff and other operating costs 17%, from R15.5 million to R12.8 million, which boosted profitability.

The company’s headline earnings per share were also boosted 14.54% to 8.98 cents, from 7.87 cents before.

FoneWorx’s policy is to pay annual dividends, therefore no interim dividend was declared for this interim period.

Businesses

FoneWorx has five brands:

  • MediaWorx (infotainment, digital and social promotions);
  • BizWorx (business services);
  • IDWorx (identity storage, management and electronic distribution);
  • DRWorx (disaster recovery);
  • and CarbonWorx (greenhouse gas evaluation and afforestation projects).

The BizWorx division is the most profitable for the company, bringing in R21.095 million for the reporting period – however, this was down 7.9% from R22.912 million from the same period in 2012.

BizWorx provides a broad range of cloud-based services for small, medium and micro enterprises, larger corporates and individuals.

BizWorx is currently evaluating the launch of its own IP-based voice service to selected niche clients in line with its ECS and ECNS licenses, it said.

BizWorx is anticipated to continue to reflect positive earnings, albeit at a slower growth rate.

MediaWorx , the second most profitable brand for the reporting period, saw profits rise 7.3% to R8.686 million (versus R8.02 million in 2012).

The subsidiary has been focusing on helping clients deal with device convergence and has place a large focus on the advertising industry.

“MediaWorx continues to strengthen its relationship with 88 mobile networks in 36 countries in Africa and continues to provide services to blue chip clients like DSTV for shows like Big Brother Africa.”

“We anticipate positive growth for MediaWorx in line with the growth of mobile digital services,” FoneWorx said.

Outlook

The group remains positive on the outlook for 2013, with its strategy around providing integrated marketing communications around the four disciplines of advertising, promotions, direct marketing enabling it to assist its clients in changing business cultures to align to the new digital reality.

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FoneWorks sees revenue slip