Logicom Pcl posted a strong set of 9M06 results with net profit surging 81% to CYP 2.6 mln or EUR 4.54 mln from CYP 1.5 mln in the same period a year ago and CYP 1.59 mln for the whole of 2005.
The improvement in the Company’s profitability is mainly attributed to the increase in turnover by 35.5% YoY to CYP 107.2 mln or EUR 185.4 mln, which was mainly driven by the Company’s expansion abroad as well as an improvement in gross profitability margin from 6.85% in 9M05 to 7.7% in
9M06 and a foreign exchange gain of CYP 662.000 in 9M06 vs. a foreign exchange loss of CYP 185.000 in 9M05.
Total revenue increased by 35.5% YoY to CYP 107.2 mln and was mainly driven by the increased sales volume in the United Arab Emirates, Greece and Italy. Sales in Cyprus amounted to CYP 16.88 mln while overseas they reached CYP 90.3 mln from respective CYP 14 mln and CYP 65 mln levels a year ago in the same period.
Gross profit margin improved to 7.7% in 9M06 from 6.85% in 9M05, as the
Company’s sales effort was concentrated on high-margin markets and products.
Operating expenses increased in absolute terms by 52.9% YoY to CYP 5.4 mln in 9M06, while in terms of revenues operating expenses increased by 0.18% to
5.05%. This was due to increased overheads incurred for the commencement of operations in Greece, Italy and Turkey. An amount of CYP 596.000 related to bad debts provision, which remained unchanged.
At the operating profit level, operating profits reached CYP 3.05 mln from CYP 2.07 mln a year ago, with the margin improving to 2.8% from 2.6% with Cyprus operations contributing CYP 1.27 mln and overseas operations CYP 1.78 mln compared to CYP 968k and CYP 1.1 mln a year ago.
Net finance cost fell to CYP 264k from CYP 567k because of the fx movement.
In the balance sheet, stock of products fell to EUR 18.9 mln from EUR 27.3 mln, debtors remained high at EUR 53 mln compared to EUR 56 mln end of 2005 while the company’s net cash position (less bank debts) was CYP 1.6 mln compared to CYP 2.5 mln end of 2005.
Shareholders funds improved to EUR 33 mln from EUR 30.6 mln with book value per share at 0.54 euro cents for a P/BV of 2.95x according to Financial Mirror calculations.
Logicom reported that its EPS based on its forecasted 2006 net profit of CYP 3.5 mln or EUR 6.07 mln amount to 5.66 cent per share, which based on the current price of EUR 1.55 on the CSE gives a 2006 forward p/e of 16x.
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