Huge Growth for Pinnacle – Acquires 51% of Merqu
Pinnacle Technology Holdings increased it revenue for the year ended 30 June by 18% to R5,8-billion, increasing EBIDTA by 30% to R419-million and HEPS by 49% to 175.1 cents.
The gross profit margin increased from 15% to 15,5%, attributable to improvements in margins in hardware distribution and the increase in mix of higher margin value-add services and financing solutions, offset to some degree by tighter margins in software distribution, which remained a difficult market throughout the year.
The group was able to reduce operating expenses as a percentage of turnover by a further 0,1% from 8,5% to 8,4%, due to the realisation of further synergies from the merger of Axiz and WorkGroup and through the incorporation into Pinnacle Africa of Explix and DataNet Infrastructure Group. Some of these benefits were however offset by the continued investment into new business divisions that will ensure further organic growth.
EBITDA increased by 30% and net profit attributable to shareholders increased by 27%. The offset between the EBITDA and PAT numbers came from higher interest costs arising out of the funding of our repurchase of 37 281 647 shares at a cost of R241-million between June 2011 and January 2012. The net result was an increase in attributable net profit margin from 4.4% in 2010 and 2011 to 4.8% in the current year.
Headline earnings per share increased by 49% to 175.1 cents per share (2011: 117.7 cents per share) which is an aggregate increase of 115% over the last two years and a compounded average annual growth rate of 44% over the past 10 years.
Pinnacle completed two acquisitions during the financial year: its services company, Infrasol, acquired 51% and therefore control of Merqu Communications for R3-million on 1 October 2011; and AxizWorkgroup acquired the entire business of e-Secure as a going concern for R5,1-million on 1 January 2012.
The group believes the advent of cloud computing will bring many exciting opportunities. Private as well as public clouds will require additional investment into data centre infrastructure solutions. Products such as F5 and Bluecoat that enhance the performance, security and availability of these networks will be in high demand as networking speed becomes critical.
The group will also enhance its product offering in the physical security and fire prevention technologies.
The launch of Windows 8 is expected to re-invigorate the IT market through the introduction of new enhanced features for both business as well as home users.