FoneWorx reports 14% rise in H1 revenue

Alt-X listed FoneWorx Holdings (FWX) announced on Wednesday (February 29, 2012) a 14% rise in revenue to R52.5 million, for the six months ended December 2011 – while gross profit increased from R27.2 million to R31.8 million, a 17% increase from 2010.

FoneWorx subsidiaries provide interactive telecommunications, switching and business services.

The group reported headline earnings per share of 7.84 cents, from 7.29 cents, before.
Group operating expenditure decreased by 4% from R5.8 million, to R5.5 million, and staff costs increased from R7.5 million, to R9.9 million – a 33% increase.

The group attributed the rise to an increase in the average cost per head, as well as other staff-related costs, including the provision for staff bonuses – for which provision was not applicable in the previous corresponding period.

Profit before tax increased by 15% from R14.0 millio,n to R16.1 million, FoneWorx said.

During the interim period, the company declared and paid a dividend of R7.5 million (5.5 cents per share) relating to the year ended 30 June 2011 – 22% up from the previous dividend of R6.0 million (4.5 cents per share).

“The growth in revenue and earnings for this interim period is primarily from organic growth, although we are looking at possible acquisitions that could enhance the group’s growth,” it said.

The group has five brands: MediaWorx (infotainment), BizWorx (business services), IDWorx (identity access and verification), DRWorx and CarbonWorx.

With greater clarity obtained on the new Consumer Protection Act (CPA), MediaWorx was able to achieve positive growth in the period under review – particularly in the area of USSD where a successful application was written and hosted for the Pep chat service, FoneWorx said.

The Pep chat service is an interactive message system used by over two million Pep Stores customers to send messages to each other – which also provides them with access to value added services such as purchasing airtime.

MediaWorx said it strengthened its relationship with 86 mobile networks across 36 countries in Africa, and continues to provide services to clients, including DSTV, for services like Big Brother Africa.

“We have made positive inroads in obtaining new clients and in particular in the Western Cape. Revenue in the Kwazulu-Natal region has also showed improved results.

“We anticipate that MediaWorx will grow steadily with new agencies signing up in order for us to manage services on behalf of their clients,” FoneWorx said.

Looking ahead, the group said that it is positive about the next six months.

“We believe that there will be positive growth in the entertainment and media sector, particularly with regard to digital spending incorporating mobile and wireless applications.

“Our two main revenue generators, MediaWorx and BizWorx, operate in an industry where behaviour patterns are moving from outdated or traditional business to a growing digital element,” the group said.

It stated that Social media and mobile applications will also have a positive impact on the group. “With the growth of digitised content, web access and mobile applications, clients will require the capacity to mine and analyse detailed and granular information not previously available. The group is well placed to be in this innovation space.”

FoneWorx said it remains optimistic about the roll-out of our fax services in Zambia, Nigeria and Kenya and anticipate traction in the latter half of this calendar year.