KEY POINTS:
Christchurch-based technology services company Jade Software Corporation is reporting a 17 per cent half-year increase in after tax profit, excluding the impact of divestments.
The company today said after tax profits were $1.89 million for the six months to the end of June 2007 and $1.62 million for the half-year to June last year.
Those figures exclude profit on the sale of health software, customer contracts and goodwill, worth $2.97m for the latest half-year and $4.51m in the corresponding six months a year earlier.
Revenue from operations declined from $17.76m in the six months to June 2006 to $16.92m in the latest half-year. Total revenue decreased to $20.95m in the latest period, from $23.27m.
Managing director Rod Carr said the 17 per cent increase in after tax profit was a good outcome in difficult trading conditions.
"We have been cash flow positive and profitable now for each quarter for the past 10 consecutive quarters," he said.
"Looking ahead to the second half of 2007, we have a full order book and Jade is well placed to benefit from any decline in the exchange rate from present levels; even more so after our recent acquisition of Methodware Ltd, which prices in US dollars."
The Methodware acquisition would add to revenue and earnings while providing opportunities to accelerate growth in overseas markets.
Further strategic acquisitions were being evaluated, Dr Carr said.
Jade bought operational risk software company Methodware last month for $12.5m cash, of which $3m was contingent on certain profit targets, and the issue of 20m Jade shares. Jade could have to find a buyer for the shares in three years time at 20c a share, or buy them itself.
The company said the trading environment for the first six months was difficult with high exchange rates, continued pressure on margins and increased competition from offshore outsourcers.
Dr Carr said the high exchange rate in the first half of 2007 put downward pressure on reported revenue from Jade's core business when compared with last year.
Jade earned 35 per cent of its revenue in British pounds and 15 per cent in Australian dollars .
Jade's association with Indian IT services provider CMC and the momentum Jade had achieved in its chosen markets of financial services, logistics, tertiary education administration, and HR and payroll had created plenty of opportunities, Dr Carr said.
- NZPA
