VOLUME growth at Powerspeed Ltd has caught up with levels achieved in last year’s third quarter buoyed by five months stock cover worth about $3,4 billion, financial director Joey Govender has sa
Govender said the company had set its sights on improving on the solid first half earnings per share performance in the last half of this financial year.
He said: “We hope to keep and improve our earnings per share at the levels achieved in the first half in line with the improvement on turnover.
The availability of products and efforts to restructure the business to focus on customer needs in the second half of the six months ended March 31, have paid off handsomely.”
The financial director said in an interview that debtors had been reduced to manageable levels of just less than one month’s turnover.
“The net overdraft position has improved from the year-end and stock value has doubled with a marginal increase in debtors’ value resulting from an improvement in debtors’ days,” he said.
On the non-performing Zambian subsidiary, Govender said there was need to restructure the investment, which had not been performing to expectation.
“We are in the process of re-organising the Zambian operation and we hope results of the process will start showing in the next four to five months,” he said. “It is our intention to rebuild and expand the Kitwe branch to be in line with all the other performing units and setting up structures in Zambia.”
The reorganization includes setting up the administration department of all the Zambian operations in Lusaka, expanding the Kitwe branch and eventually setting up branches in other cities.
In the half year to March 31 results, Powerspeed attributable income at $815 million was 202% above the 12 months to September 30 2002’s $269 million.
This was 648% higher than $109 million for the six months comparable. Turnover rose by 45% more than the increase in attributable profit to $4,5 billion from $1,3 billion achieved in the same period last year.
Overheads doubled from the six months to March 2002 with sharp increases in employment costs and motor vehicle expenses.
Govender attributed the growth in both turnover and attributable profit to the availability of products and the successful restructuring of the business.
Powerspeed declared an interim dividend of 300 cents per share but it is “intended that the company provide shareholders with the option of cash or scrip”.