South Africa: Tough Times Hurt Compu-Clearing
Software developer Compu-Clearing has posted preliminary results showing a drop in profitability inflicted by difficult economic conditions for the year to June 30. As a supplier of freight- forwarding and customs- clearing software, its income is closely linked to import volumes, which have slumped 30% during the year.
Yet its payroll fees shot up 17,6% to increase its staff and retain the skilled personnel it already employed. The higher staffing costs saw Compu- Clearing's operating costs rise 13,8% and the operating margin contract from 27,2% to a far smaller 16,3%. The overall result is a dip in attributable earnings to R6,5m, down from R10,9m, on an almost static revenue of R45m. Basic earning a share fell 41% from 27c to 15,8c.
Chairman Arnold Garber said the company's cash generation continued to be strong and its cash balances remained healthy at R25m, despite dividend payments to its shareholders of R10,2m. It has declared a dividend of 25c for the year.
While the economic slowdown dampened its performance, its customer base grew and mitigated the effect of the decline in import volumes. The fact that its revenue dropped just 1% compared with a 30% decrease in import volumes meant the group was in a strong position to benefit from a turnaround in the economy, Garber said.
What will help it to grow on a lower cost base is its increasing use of the internet to distribute its software, expanding its reach without major distribution costs. Garber expects to see future growth for Stash, a warehousing software, and more new revenue should be generated by offering new products.