COMPUTER MANUFACTURER PINNACLE PROFIT UP 143% TO R16,8M

Mergers, Acquisitions and Financial Results

Computer manufacturer Pinnacle Technology has increased profit 143% after efforts to win more customer loyalty paid off in results for the six months to December released yesterday.

Pinnacle manufactures the Proline PC and has won more market share in the past few months, allowing it to post healthy results in the interim period.

Revenue of R390m almost doubled the R200m of last year's interims and net profit of R16,8m is up from R6,9m. Headline earnings a share trebled from 4,1c to 12,2c, although current liabilities rose from R93,7m to R167m.

Pinnacle's shares gained 5c to trade at 205c yesterday. CEO Arnold Fourie said the directors had focused on brand awareness by improving prices, holding more stock and maintaining quality. Those efforts pared the gross profit margin from 16,98% to 16,56% but helped boost turnover.

Inventory levels had shot up to R81,9m from R59,4m to handle the growth in turnover and to ensure that stock was available for expected sales this year, Fourie said.

Growth also came from a 48% improvement in the revenue of its infrastructure and support division, which brought in R278m. Another R5,1m came from exercising a right to take over Pinnacle shares that had been held as collateral for the debts of a now dormant international operation. Those shares were used to acquire 35% of Pinnacle Micro Cape.

Fourie said consumer demand would be strong for home entertainment systems and mobile technologies for the next five years. On the business side, there was a growing demand for reliable data storage and disaster recovery technologies, other areas in which Pinnacle operates.

Pinnacle hopes its initiative to install Proline PCs in schools in Mauritius and Uganda will lead to similar projects.

This week, Pinnacle finalised a deal to sell 20% of its shares to Amabubesi Investments. The deal is expected to help win contracts to supply its technologies to government.

Business Day