Digicore notes decline in interim operating profit

Digicore Holdings (DGC ), a provider of mobile asset-tracking and management solutions and telematics technology, on Tuesday (February 21, 2012) announced diluted headline earnings per share of 10 cents for the six months ended December 2011, from 10.5 cents previously.

The group delivered an interim dividend per share of 3 cents, unchanged from 2010.

It recorded a 24% rise in revenue to R400.5 million, from R322.44 million, but operating profit declined to R37.98 million, from R40.27 million before.

EBITDA increased by 12% to R70.7 million compared to the prior year.

Digicore said its engineering division comprises a manufacturing plant in Durban, development teams in SA, UK and Australia, a worldwide product support team and an internal information technology arm. “In the first half of this financial year, we completed development of a new-generation 3G telematics device aimed at Japanese and Australian markets. The roll out of our new mobile web application CtrackMobi2 took place in February 2012,” it said.

The group said its South African consumer business underperformed against budget for the first six months, reflecting the exceptional demands on resources of the Discovery insurance project. On the fleet management side, the launch of FleetConnect in SA was a “resounding success” and the business is well prepared to launch this product to the international market in 2012.

“The integrated fare-collection system project costs and launch delays impacted financial performance, but the successful launch of a pilot project in cooperation with Absa and the Peninsula Taxi Association is pleasing,” Digicore said.

It noted that its African operations beyond SA recorded exceptional growth in the past six months. Ctrack Africa is currently present in 22 countries, with distributors located in 16 of these countries.

DigiCore said it is positioning itself to lead the industry shift away from selling tracking services, towards a service-and-subscription revenue model supported by an ongoing value-add solutions offering.

“A new division, strategic and special projects, has been formed as part of the group’s recent restructuring. This division is tasked to identify and define innovative applications and future telematic trends. Insurance telematics is just one example of this approach, with our success in this field reflected in DigiCore’s insurance telematics solutions being duplicated in other countries,” it said.

Looking ahead, Digicore concluded that the European economic crisis remains a concern, “but we are cautiously optimistic that the group will show improved revenue and earnings growth for the full year to 30 June 2012”.

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Digicore notes decline in interim operating profit