Highlights
Up Operating profit 52%
Up Revenue 55%
Up Earnings per share 55%
Commentary
The DigiCore board is proud to announce another record breaking set of results
for the year ended 30 June 2008.
With the successful continued implementation of global contracts with blue chip
customers all our divisions, subsidiaries and distributors have performed well,
allowing us to grow our revenue by 55% to R685million (2007 :
R441million) whilst attributable earnings rose 59% from R88million in the
previous year to R140 million for the current year. This remarkable achievement
is on the back of seven consecutive years of excellent growth.
In achieving this strong revenue performance we have continued to seek
opportunities in our chosen 36 international markets and this combined with the
ongoing management focus on controlling our overheads resulted in our basic
earnings per share increasing by 55% to 68.7 cents per share from 44.4 cents in
2007. Headline earnings per share increased 47% to 64.7 cents per share.
During the year under review we increased our shareholding in our subsidiary in
the UK (DigiCore Ltd) from 50.1% to a wholly owned subsidiary with the
effective date of the transaction being 1 July 2007. The cost of the
transaction was R42.2 million which was part settled in cash and shares to be
issued on achieving profit warranties for the years 30 June 2008 and 30 June
2009. The full details can be found in the SENS release of 30 June 2008.
Our operating profit increased by 52% to R204million from R135million in 2007,
remaining at an unchanged 30% mark of revenue for the year.
In order to support the operational growth, we have continued to invest in the
development of our technology and staff complement in order to deliver superior
and innovative C-track Mobile Asset Tracking, Management and Information
Solutions for vehicle owners globally.
In this tougher trading period cash generated from operating activities
increased by 117% from R52 million to R113 million at June 2008, whilst cash
and cash equivalents increased by R49 million to R108 million at the end of
June 2008.
Nature of business
DigiCore is a leading provider of innovative Mobile Asset Tracking, Management
and Information Solutions for vehicle owners, globally.
We supply superior vehicle tracking solutions ranging from a basic track and
trace product used to recover stolen vehicles (although still being interactive
with the client), to complete integrated enterprise level solutions for large
fleet owners such as the Royal Mail (UK), the South African Police Service,
eThekwini Metro, BHP Billiton (global) and many others.
Local operations
Our South African companies consist of divisions focused on the design,
development and manufacture of our products, the sales and support regarding
the management of fleets and the recovery of stolen vehicles (SVR). All three
divisions have grown substantially during the year.
DigiCore Fleet Management (DFM) maintained their position as the number one
service provider in South Africa and added several Blue Chip companies to its
customer base during the last financial year.
On the SVR front we have made inroads into various car dealerships and
insurance brokers which are the major sales channels for these products. These
initiatives will be the launching pad for next year's growth in the SVR sector.
Although this market is challenging we are confident that we will soon capture
a sizeable portion of the new monthly installation requirements.
International operations
The number of units exported grew by 60% during the year to 52 617, being 50%
of our production. We have not only maintained our ground in established
markets, but have seen good expansion in the Middle East and Nigeria during the
past year.
Our world-wide investment in training people, support and commitment to our
distributors, is paying off. Our two wholly-owned subsidiaries, DigiCore Ltd
in the UK and DigiCore Europe, based in Holland, performed well.
In the UK we have a leading position in the utility company sector with
customers including the Royal Mail, Thames Water, Severn Trent Water, nPower,
Southern Water and Yorkshire Water.
In Pakistan we maintain our number one position as the SVR company of choice
with the largest customer base.
In the UAE, customers like the Abu Dhabi and Sharjah Municipalities, DHL as
well as the Dubai Police, have given us a solid base for future expansion.
In Nigeria a national order from Chevron, as well as a joint marketing campaign
with MTN for our SVR products, have made Nigeria our fifth biggest export
market.
The future
Amidst market pressure and a general slowdown in the world economy, we are
optimistic that the year ahead will again be a good year as we are continuing
to not only roll out contracts won during 2007 but adding large fleet owners
including Government departments to our client base as they all need to
increase their efficiencies.
With new innovative products soon to be launched, we aim to remain ahead of
global competitors to allow us to take full advantage of the needs of vehicle
owners to reduce their cost and protect their assets at the same time. Moving
some of our production abroad this year will also have the positive effect in
reducing our production costs.
With the expansion of our international team, we are looking forward to growing
our exports again in the coming year. Annuity income growth models will also
remain high on the agenda.
In conclusion, the board is confident that we can sustain reasonable growth
during the next financial year.
For and on behalf of the board
NA Gasa NH Vlok
Chairman Chief Executive Officer
17 September 2008
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