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Datatrak Holdings plc has registered a better performance in its interim results over the same period last year, with revenues reaching Lm709,000 – Lm55,000 more than the previous year.
The company, quoted on the alternative list on the Malta Stock Exchange, has seen this increase in revenue give positive results in pre-tax profits as total expenses have remained at the same level. Improved turnover was registered in both Datatrak Solutions Ltd and Datatrak IT Services Ltd.
Datatrak is passing through a turnaround phase of controlling its costs and opening up new operations for overseas clients. There is however nothing on the progress of the negotiations relating to its Libyan venture. Datatrak has also continued to include development costs as intangibles that are amortised over the expected useful life of the product provided.
The income statement explains that pre-tax profit of Lm60,000 is attributable to two equity holders. For those investors in the parent company who have their shares quoted on the MSE, there’s a loss of Lm34,000, whilst the minority shareholders owning subsidiaries in the joint-venture with Datatrak Holdings, returned a profit of Lm94,000. It is the net effect which reflects the profit of the Datatrak Group. This has meant a loss of 2 mils per share, which is double that registered in the interim year 2005.
Datatrak also generated less cash from operating activities whilst it used more cash for investing, earning more cash from financing activities including Lm134,000 by way of an advance from related parties. The overall net cash position is negative and worse than that at June 2005 by around Lm48,000.
A significant movement is Lm476,000 in assets, nearly a quarter of total assets earmarked for disposal.
In the performance review, the directors said that subsidiary Datatrak Mena is working towards concluding an agreement with Datatrak Nigeria. Another member of the group, Datatrak Online which is involved in vehicle tracking in the UK, has continued to register positive progress which is expected to continue in the second half of the year. Datatrak has also won a local client, the Malta Transport Authority, to provide taxi meters and also signed two major dispatch IT clients for UK companies. It has also registered progress via its vessel monitoring systems.
Directors have also announced an extraordinary general meeting for 20 November, in which a resolution will be decided upon over the value of Lm2.2 million in accumulated losses to be set off against the share premium account. If the resolution is approved, the accumulated losses will be wiped off and once profits will be made that can be distributable, these will be considered for a declaration of dividends. The company has enough balance in its share premium account to absorb these losses.
There is no explanation of the difference between the Lm1.7 million accumulated loss registered as at 30 June 2006 and the Lm2.2 million being proposed as accumulated losses for offset. The difference may be made up of part of the deferred tax asset related to accumulated losses, or other write-offs in assets used by the company which it feels have a reduced value for future operations.
Investors are expecting a full explanation during the EGM. In approving the resolution, shareholders will look forward to receive a dividend for the first time form an investment that has long been trading at a value, much less than that with which it was bought by them.
The elimination of accumulated losses not only cleans up the balance sheet but makes it possible for a declaration of dividends in due course. If the resolution to wipe out the accumulated losses is not approved, then profits made in future will have to first zero this value. It is the joint-venture subsidiaries that are registering positive results and giving a brighter future to the group. |
