Amecor posts good results

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Security technology company Amalgamated Electronic Corporation Limited (Amecor) has delivered what it says are an outstanding set of results for the year ended March 2009.

Bolstered by the acquisition of 50.1% of alternative power supply group, Power Development Services (PDS), in July last year, turnover increased dramatically from R44 million in 2008 to R140 million.

Likewise, operating profit increased 107% from R19 million to R40 million and headline earnings per share were up 47% from 23 cents a share to 33.7 cents.

An annual dividend of eight cents a share has been declared.

Amecor CE Dereck Alexander says while the acquisition of a stake in the PDS Group had been positive for Amecor in respect of sales volumes and turnover, the company had also experienced good organic growth across its existing operations.

The company`s main subsidiaries, FSK Electronics and Sabre Radio Networks supply sophisticated electronic security solutions to the private security industry throughout Southern Africa.

While the slow down in sale of residential properties in the domestic market had adversely affected the roll-out of private home security systems, the company also has major clients in the commercial and industrial sector where the market remains quite buoyant.

“Also, we have rolled out of lot of new products into the security market in the past year using our own proprietary technology and this has made a huge difference,” says Alexander.

A number of these products, he notes, had taken up to two and half years in the product development stage.

As Eskom had not yet fully addressed its key power supply problems, the market for alternative power sources supplied by 50.1%-owned PDS Group remains robust, says Alexander.

PDS supplies the full range of alternative power products from large fuel-powered generators to smaller uninterrupted power supply equipment. Its customers are mainly in commerce and industry, government and the mining sector.

On the back of government`s continuing infrastructure development programme, it has just won a major order for generators supplying power back up to state-owned hospitals, clinics and schools.

“Things have slowed a little but PDS currently has a full order book,” Alexander observes.

In addition, there is enormous scope within the company for the provision of inter group technology solutions through further product development and innovation, particularly via Sabre`s radio frequency and GSM networks.

Moreover, as these networks are largely in place, any additional capacity that is added tends to flow straight to the bottom line, Alexander says.

“We have shown that we are very resilient to the downturn, which started in October last year, and I see no reason why we shouldn`t be able to deliver a similar level of performance for the current financial year.”