Home»Latest News»Dark cloud falls for RPC data

Dark cloud falls for RPC data

0
Shares
Pinterest WhatsApp

IT firm, RPC Data  which in April 2013 halted its trading on the Botswana Stock Exchange ahead of the announcement of a full takeover offer has reported a decline in profitability for the unaudited half year results for the year ended May 2013. 

In a financial statement released on Friday, it is said that the company has shown significant improvement in performance since November 2011 due to a number of significant contracts including ZESCO in Zambia and the collection of old outstanding debts in the last six months that had previously been provided for as bad debts.

 

According to the results, the company recorded a turnover of P25, 3million as compared to a mere P18, 6million in 2012 during the same period. The profit for the year stood at P3, 5million compared to P9, 3million in prior year.

“An analysis of the profitability over the last three year period shows that profitability is decreasing. Net profit in the second half of the year reported decline by 28 per cent. Revenue and gross profit was stagnant during that period whilst overheads grew by 36 per cent. This led to the decline in profitability in the second half. As such the first quarter earnings for 2014 year end are expected to be weak as the trend is expected to persist,” states the statement.

 

The Gazette Business understands that the management is not optimistic about the forth coming year and has lowered the profit forecast due to the fact that the company has not been awarded any significant contract in the coming year. Nevertheless, the management continues to seek ways to grow revenue and manage overheads in the face of slowing business especially in Botswana which is the primary market for the company.

 

RPC, which has been silent in the market, in February sold its 33 per cent shareholding in ASC to majority shareholder for about P1million. “The profit of P256, 626 before tax made on the sale is included in the profit for the current year. The sale of ASC left the group with no other investment and as such the difference between the company and group emanates from profit made after the sale of ASC. This will be the last time the group reports consolidated financial statements unless the circumstances change,” reads part of the statement. The directors have also sold their  building located at Plot 39 in Gaborone International Commerce Park because it serves no operational advantage and is just tying up shareholders’ funds. The intention is to sell the building and RPC will then become a tenant, taking approximately 40 per cent of the floor space. An offer of P6, 25million was accepted by the board but the transaction needs to be ratified by the members to be completed.

 

Meanwhile, the company unveiled 65.6 thebe per share offer to its investors last month. In a notice, RPC Data independent directors said the offer would comprise both the management buy-out offer and a share buyback, which once successfully concluded, would result in a director-led consortium taking full control of the listed IT firm.

Previous post

Magistrate courts besieged by poor recordkeeping

Next post

France to give ‘clear evidence’ Syria regime behind attack