Pinnacle Technology sees improved H1 earnings

Shares in JSE-listed ICT products provider, Pinnacle Technology Holdings (PNC) have seen meteoric growth over the past 52 week period, more than doubling from R6.45 to R13.65.

The group has a market cap of R2.31 billion.

The group said late Tuesday that it is reasonably certain that its interim results, for the six months ended December 2011, will reflect headline earnings per share and earnings per share of between 76 cents per share and 80 cents per share – or 58% and 67% higher than both the HEPS and EPS of 48.0 cents per share, previously.

In January, the group stated that it expected H1 earnings to be 45% higher than the corresponding period.

A dealer at PSG Konsult said that if the group’s results could be repeated over the next six months, it would be viewed as an attractive prospect for investors.

In October 2011, Pinnacle entered into a sale of shares agreement to acquire a 49% stake in Explix for R3.5 million.

Explix provides marketing, distribution, installation and provisioning of Sharp branded multi-function printers (MFPs) to both commercial and public sector entities.

And in September, the group reported a 45% rise in headline earnings per share to 117.7 cents for the year ended June, from 81.3 cents a year ago.

Revenue was 57% higher at 4.96 billion rand, of which 24% came from organic growth in the existing group, and 33% due to the acquisition and incorporation of the Axiz Technology Group and Centrafin.

EBITDA increased by 55% to R323 million, and net profit attributable to shareholders increased 58% to R220 million. Group net profit improved marginally from 4.4% to 4.5% of turnover.

The board of directors proposed a dividend of 23 cents per share, from 16 cents per share in 2010, yielding a dividend cover measured against headline earnings of 5.1 times.

Through its subsidiaries, Pinnacle offers hardware and software products, implementation solutions as well as structured finance solutions.

The group expects to publish its results on about March 15.