JSE-listed fleet management and\u00a0vehicle tracking group,\u00a0DigiCore has reported a decline in sales for the for the six months ending December 2012, but forecasts a turnaround following the completion of a restructuring process.<\/p>\n
Revenue for the interim period\u00a0increased\u00a012% to R448.48 million, but operating profit dropped 54% to R17.28 million.<\/p>\n
Diluted headline earnings per share declined 55% to 4.5 cents, from 10 cents in 2011.<\/p>\n
A 7% increase in gross profit to\u00a0R299.2 million was affected by the 11% increase in operating expenses\u00a0to R250.2 million.<\/p>\n
“We are satisfied that the business has turned, albeit slowly. We increased\u00a0turnover, unit sales and annuity income in real terms. We have\u00a0restructured and changed management teams, an investment for\u00a0future growth,” it said.<\/p>\n
DigiCore noted that while cellular connection incentive bonuses ended,\u00a0lower monthly costs (down 70%) will have a much more positive effect\u00a0on profitability in years to come. Cash flow during the period was\u00a0affected by this change, it said.<\/p>\n
The group said it expanded into new areas geographically, and through\u00a0some smaller acquisitions in the past 18 months. “We will, in the next\u00a012 months, consolidate the businesses to better manage working\u00a0capital, cash flow and expenditure,” the group said.<\/p>\n
For the six months ended December 2012 the group increased its\u00a0installed base, with an additional 41,000 systems shipped. “Additional investments have also been made in\u00a0maintaining and enhancing our technology offerings,”\u00a0DigiCore said.<\/p>\n
South Africa<\/strong><\/p>\n For Ctrack South Africa,\u00a0contract\u00a0renewals improved over the period and continue to increase monthly.<\/p>\n DigiCore said that a\u00a0number of long-standing fleet orders and partnerships have come “The\u00a0fleet tender business has been particularly busy, with many tenders\u00a0in adjudication over the next three months. Partner channels to\u00a0market have expanded and the groundwork completed to support\u00a0sustainable growth,” it said.<\/p>\n DigiCore said\u00a0its gross margin declined to 66.7% from 69.5%, as a result of selling units for its deal with Discovery at reduced margins.<\/p>\n The group\u00a0provides Discovery with telematics products for its short-term insurance entity Discovery Insure.<\/p>\n Discovery Insure recorded solid growth. “While\u00a0not meeting full volume expectations, this initiative has comfortably\u00a0exceeded 30,000 Ctrack insurance telematics systems installed to date,” DigiCore said.<\/p>\n Looking ahead,\u00a0DigiCore said it\u00a0is cautiously optimistic of an improved trading performance\u00a0in the year ahead. “With management and structural changes\u00a0complete, and a new product set released, the group is well positioned\u00a0to capitalise on opportunities in the fleet, mining, government\u00a0and insurance telematics industries.”<\/p>\n DigiCore points to earnings decline<\/a><\/strong><\/p>\n DigiCore lifts full-year revenue by 19%<\/a><\/strong><\/p>\n DigiCore\u2019s blue sky potential<\/strong><\/a><\/p>\n Digicore notes decline in interim operating profit<\/strong><\/a><\/p>\n
\nto fruition and initial roll outs will start to gather momentum.<\/p>\nMore on\u00a0DigiCore<\/h3>\n