Logicom Pcl (LOG) reported a 15.7% increase in total sales in the first half on the back of a sharp increase in overseas sales while net profits surged 32.4% during the period as the company managed to improve its margins.
Total turnover improved by 15.7% to CYP 50.06 mln in the first half of 2005 from CYP 43.27 mln a year ago in the same period, with sales in Cyprus declining 4% to CYP 9.6 mln, while turnover in overseas markets where LOG is active such as the UAE, Greece, Jordan and Lebanon surged 21.5% to CYP 40.42 mln from CYP 33.26 mln previously.
Gross profits improved to CYP 3.75 mln from CYP 2.97 mln, with the gross profit margin improving to 7.5% from 6.9% a year ago. While administration costs jumped 18% to CYP 2.23 mln, operating profits showed a remarkable 50% jump to CYP 1.63 mln from CYP 1.08 mln previously.
In sharp contrast to the contribution of overseas sales to total turnover, most of the increase in operating profits originated from Cyprus where operating profits jumped to CYP 883.650 from CYP 188.194 while operating profits from overseas operations actually fell to CYP 738.353 from CYP 898.159 before.
The company blamed this on its expansion drive abroad, as it needs to spend more money to open new offices and hire people to man its expanding operations.
Finance income improved to CYP 169k from CYP 131k but finance costs jumped sharply higher to CYP 786k from CYP 414k before. The company said part of the reason for the sharp increase in finance costs relates to unrealised exchange losses amounting to CYP 334k as the dollar gained against the Cyprus pound.
Pretax profits were up at CYP 1.01 mln from CYP 803k a year ago while net after tax profits jumped 32.4% y/y to CYP 951.068 in the first half of 2005 from CYP 717.970 net profits in the first half of 2004. Last year, LOG had reported net profits of CYP 1.43 mln.
Earnings per share improved to 3.08 cent from 2.33 cent, but book value per share was steady at 28 cent per share for a price to book value of 0.83x while the historical p/e on 2004 profits is 10x based on the current price of 28 cent in the market.
In the balance sheet, Logicom reported that its stock of goods continued higher to CYP 8.75 mln as at end of June compared to CYP 7.5 mln end of December, debtors and prepayments were up at CYP 22.9 mln from CYP 20.4 mln while creditors and dues jumped to CYP 13.8 mln from CYP 9.2 mln.
Cash and bank balances were marginally lower at CYP 8.14 mln end of June from CYP 9.6 mln end of December 2004, bank overdrafts were down at CYP 5.92 mln from CYP 8.5 mln, while short and long term loans were moderately lower at CYP 5.7 mln from CYP 6.1 mln.
