Poynting Interim Results December 2013


Poynting Holdings has released its interim results for the six-month period ending 31 December 2013.

Poynting Holdings recently released its Interim Results for the six-month period ending 31 December 2013.

Readers are advised that the financial results of Aucom for the six months ended 31 December 2013 have not been included in Poynting’s interim financial results.

Highlights of the release include:

* Earnings per share increased by 68.4% from 2.44 cents to 4.11 cents;
* Revenue increased by 27.4% from R41.9 million to R53.5 million;
* Exports contribution increased from 51.7% to 68.3% of Group revenues;
* Tangible net asset value per share increased by 76.9% from 35.3 cents to 62.5 cents;
* Bank and cash balances increased by 224.7% from R11.4 million to R36.9 million as at 31 December 2013;
* PSG Private Equity Proprietary Limited (“PSG Private Equity”) commits to R100 million investment. R25 million was paid to Poynting Holdings Limited (“Poynting”) for the issue of 16 million Poynting shares, R23.7 million was paid to existing shareholders and R51 million is subject to the Preference Share Subscription Agreement on 4 March 2014 in terms of which PSG Private Equity will subscribe for, and Poynting agreed to issue, 20 400 000 redeemable, convertible preference shares of no par value, at a subscription price of R2.50 per Preference Share (Refer Subsequent Events); and
* Poynting acquired 100% of the entire issued share capital of African Union Communications (“Aucom”). Aucom had an unaudited and unconsolidated turnover of R52.4 million and profit after tax of approximately R8.4 million for the interim period up to 31 December 2013.

The Defence division focuses on the electronic warfare (EW) and communications market which comprises of direction finding, monitoring, jamming, counter-RCIED, log-periodic dipole array and communication antennas and related products such as masts and electronics. The Defence division sells to military system integrators and specialised distribution partners. Most of these antennas and related products are exported outside of South Africa. This division has shown excellent results and for the 6 months ending 31 December 2013, has done R37.5 million in revenue which makes up roughly 70% of the total company revenue of R53.5 million. The Defence division generated R21.7 million in revenue in the previous six months ending 31 December 2012.This is an increase of 74% compared to last year.

The Defence division is continuing to become internationally established as a leader in EW antenna technology. The market penetration is now rapidly expanding and this is mainly due to the international large customers increasing and their order book after the excellent first six months has increased substantially compared to the beginning of the period. Defence division performance is more remarkable given a cyclic downturn in the international defence industry and is certainly not spurious given the simultaneous growth in the order book and customer numbers. Commercial division operations are showing the benefits of mass production in China but restructuring of its sales channels and production facilities in China has negatively impacted on profitability. These disruptions are now largely complete and better performance is expected in the second half. The Commercial division generated revenues of R13.8 million in the six months ending 31 December 2013.

Our CCS division which offers clever solutions aimed at the base station market in order to provide coverage to cellular network operators has had stagnant sales. The Board is engaged in restructuring and improving product sales and marketing. Our New Business division is aiming to provide digital TV (DTV) transmission infrastructure to African customers. The Aucom acquisition is therefore a mutually beneficial one allowing us to design, provide and install equipment which delivers DTV signals to consumer television. Aucom is the market leader in Africa with decades of experience in the TV broadcasting industry.

The Growth Plan of Poynting is continuing with the main focus being acquisitions to improve international sales channels and add on acquisitions to current Defence, Telecommunication and DTV business areas. Poynting is trying to position itself as a leading player in the “Triple” play future market where it is widely believed that TV, Voice and Internet communications will converge since all are inherently digital. We are actively engaged in this growth plan with a pipeline of opportunities which are being actively pursued.