Revenue increased to R38.8 million (R33.7 million). Gross profit rose to R25 million (R19.2 million) and an operating profit of R2.8 million (loss of R300 000) was made. A net attributable profit of R2 million (loss of R2.8 million) was recorded. In addition, the headline earnings per share from continuing operations amounted to 2.20cps (loss of 0.01cps).
Poynting expects similar or better Defence revenue in the second half of the financial year, and has an order book supporting this assessment. We are also actively looking for acquisitions which will enhance the Defence product range and/or give the company better access to the USA market.
The Defence Division products are sold via long-term relationships with several local and international partners. Company brand and reputation is key to acceptance in this market, which took many years to develop. There are many signs that Poynting is recognised as an internationally respected supplier in this marketplace.
Whereas Poynting previously battled to get customers to visit its exhibits at international defence shows, it now finds that it has to allocate additional personnel to deal with the increase in enquiries. The order pipeline has also grown in size and number of interested customers from all over the world.
Commercial revenue and profit will be better due to healthy existing product sales and additional revenue from the micro base stations for which significant orders are already in place or imminent. Poynting Direct has been turned around from a loss-making first half to an expected profitable second half year, which positively impacts on Commercial Division profitability. Commercial products in the cellular data space are benefiting from the exponential growth in cellular data, both locally and internationally. Cellular antennas now comprise the majority of revenue and also show the fastest growth. Sales of products in the WiFi/WiMax space have been shrinking during the past two years.
Poynting historically has had a stronger second-half performance and indications are that we should maintain or improve on first-half performance. Overall performance is, however, never certain due to the uncertainty associated with the Commercial Division sales, which can change relatively quickly due to fluctuations in market sentiment.