Poynting results just the tip of the iceberg


On 25 September 2013, Poynting released its Summarised Provisional Consolidated Financial Statements, and this was followed up with a presentation to shareholders on 26 September at the Hyatt Regency in Rosebank.

CEO, Dr Andre Fourie, and Financial Director, Johan Ebersohn, presented on behalf of Poynting. The theme of this presentation was ‘The Tip of the Iceberg’, indicating that Poynting’s value lies beneath the surface and what you see is as they say, ‘just the tip of the iceberg’.

Juergen Dresel, MD of Poynting’s Defence division, says it is the best year the Defence division has ever had. The Radiant Antennas acquisition has had a very successful first year of operation and contributed positively to Poynting’s overall results. Our Defence division’s successful trend over the last couple of years comes on the back of increased international expenditure in a bid to improve homeland security in a number of first world countries.

There were several highlights of this year’s results for the year ended 30 June 2013. Net profit after taxation increased by 36.04% from R7.233 million in 2012 to R9.840 million in 2013. Basic earnings per ordinary share increased by 28.12% from 8.18 cents to 10.48 cents per share. Net tangible asset value per share increased from 21.75% from 32.81 cents to 39.95 cents per share.

Extracting the core aspects from Poynting’s vision statement perhaps best describes the nature and culture of the company:

* Our bedrock value is our belief that we shall succeed through clever innovative design;
* We shall provide products, information and advice with technical honesty and integrity;
* We prefer multicultural and diverse employees operating in small teams;
* Poynting teams enjoy working hard and are given a high level of autonomy, freedom and responsibility;
* All are encouraged to be brave and headstrong and must learn to thrive on challenges;
* Poynting is proud of our African roots but always aims at international success; and
* Poynting’s activities should benefit shareholders, employees and communities we encounter.

Perhaps more indicative of company performance is the EBITDA, which at R18.5 million, has also grown by 24.96% and equates to 19.75 cents per share. The number is the most representative indicator of profitability since our final earnings number includes amortisation and depreciation of about R7.744 million, which mainly relates to depreciation and amortisation of intangible assets.

Commercial division revenue increased by 10.97%. Most significantly, the Commercial Division EBITDA contribution increased by 57.98% from R4.393 million to R6.940 million. The Defence division revenue increased by 36.57% and EBITDA increased by 59.17% from R8.389 million to R13.352 million, compared to the previous comparative period.

The two main divisions on the company, Defence and Commercial, have grown EBITDA by 58.77% from R12.781 million to R20.292 million. It is significant to note that the two main divisions marginally increased exports from 50.57% in 2012 to 51.63% in the 2013 financial year, with the largest contribution coming from Europe and North America. Poynting has succeeded in exporting unique locally developed technology into two of the largest first world markets against significant international competitors. We believe that the export numbers are still low and that considerable growth in export sales is possible, given the size of the international market for both Commercial and Defence products.

The CCS division made a loss before interest, tax, depreciation and amortisation of R2.410 million. CCS expenditure relates to investment in product development, new technology and marketing, while actual income is limited to trial installation and prototypes for network approval and customer acceptance. Profitability is only expected in the 2014 financial year. Current product development is done in close collaboration with large operators, including multinational cellular companies who are leaders in this area.

Our new third generation LTE billboard micro base station is generating considerable interest and evaluation and sample units have been delivered. While co-operating with potential customers, Poynting has funded and retained full IP ownership of these products. A number of patents and registered designs have also been filed to protect this IP.

Poynting plans to grow by performing strategic acquisitions, autonomous acquisitions, developing new business areas/technologies and strong growth in all of these areas, including divisions. We expect the Defence and Commercial divisions should continue their strong growth in the future.

For further information, please visit our Web site under our Investor Relations section: http://www.poyntingdefence.com