Logicom lifts first half profits by 6.9%

Logicom Plc (LOG), Cyprus’ leading IT and software company with an international presence reported a 17.3% jump in turnover during the first half while net profit were up 6.9% Year-on-Year compared to a year ago.

LOG reported total turnover of EUR 155.74 mln (CYP 91.07 mln) in first half of 2007, up 17.3% compared to EUR 132.74 mln (CYP 77.6 mln) in the first half of 2006 and EUR 249.2 mln or CYP 145.77 mln for the whole of 2006.

The Cyprus operations accounted for 15.5% of total turnover at CYP 14.2 mln while international operations accounted for the remaining CYP 76.8 mln. The gross profit margin was squeezed lower to 7.3% of sales from 7.7% a year ago, but with administrative costs under control, as they increased by 6.5% to EUR 6.8 mln, Logicom reported a 20.6% increase in operating profits to EUR 4.8 mln.

Net finance costs were sharply higher at EUR 649.179 in the first half of 2007 from EUR 107.412 a year ago as bank loans surged to EUR 51.7 mln end of June 2007 compared to EUR 47.4 mln end of December 2006.

This may well explain why the company has announced placed to raise new capital amounting to EUR 7.7 mln. Trade and other creditors were also up at EUR 44.2 mln from EUR 31.7 mln end of December.

Stock of goods climbed to EUR 26.6 mln end of June from EUR 25.3 mln end of December as the international expansion drive intensified while debtors and receivables were also up at EUR 78.8 mln from EUR 65.5 mln. Cash balances were very healthy at EUR 23.9 mln from EUR 18.8 mln end of December.

Logicom reported net profit of EUR 3.871.863 until June 2007, up 6.9% compared to EUR 3.6 mln a year ago and EUR 5.4 mln reported for the whole of 2006. Earnings per share amounted to 6.27 euro cent.

Analysts have forecast that Logicom will report net profit of EUR 7.4 mln for the whole of 2007. Based on the forecast, LOG is trading on a 2007E p/e of 13.5x while with its book value at EUR 0.60, the price to book value as calculated by Financial Mirror is 2.7x.