KEEPS ON DELIVERING
LOCAL PROLINE-BRANDED PC MANUFACTURER, software and service provider Pinnacle just keeps on delivering. Recent interim results to December saw the share rise above 400c (it was below 270c in early December last year).
Pinnacle reported 84% growth in headline earnings per share to 22,5c, on 87% turnover growth to R729m (56% of this was organic). EBITDA margins improved to 7,4% from 6,8% in the comparable six months. Though there was a cash outflow from operations, there was a similar trend in the last six months, recovering to a strongly positive inflow by year-end.
Efforts to diversify the product range and distribution channels – which Pinnacle attributed in part to its continued success – saw, for example, Pinnacle Africa making a firsttime revenue contribution of R47m, and EBITDA of R1,2m. OPPORTUNITIES Pinnacle said the arrival of true broadband – WiMax, or 4G in wireless, and 4Gigabyte ADSL in fixed line – would increasingly drive the demand for technology products and services. Orders arising out of Nepad school-connectivity initiatives. Pinnacle said initial orders for recently released 64-bit technologies would “notably” contribute to second-half results. Pinnacle Africa seems to offer potential, as the continent increasingly participates in the digital age (albeit initial margins were low). RISKS Pinnacle said changes in the economic climate brought about by rising interest rates necessitated caution. • Any currency instability could also cause hiccoughs.