ISA declares interim dividend as cash mounts


ISA declares interim dividend as cash mounts

Published Date: 2020-11-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

ISA declares interim dividend as cash mounts

The IT security specialist reported lower first-half revenue and earnings but has excess cash on hand.

ISA Holdings' shares rose on Friday after it broke with tradition and said it would distribute surplus cash reserves halfway through its financial year. It's paying a 5c interim dividend after reporting what it said was a healthy profit.

The IT security specialist says first-half earnings were underpinned by a high portion of recurring revenue, a robust balance sheet and strong cash flows.

Turnover fell 44% to R29.6 million for the six months ended August, largely due to a fallout it had with one of its key vendor partners towards the end of last year. As a result it had to abandon most of its sales pipeline derived from its historic Check Point Software Technologies customer base, which accounted for as much as 90% of its turnover in the financial year prior to the vendor relationship failure. However, it said it remained encouraged by customer support for its 'next generation' security technologies that target the fast-changing threats to IT security.

Profit before income and other expenses declined by a lesser 25% to R18.9 million due to growth in its higher-margin Managed Security Service and Managed Security Solution offerings. Profit after tax came in 44% lower at R7.74 million, impacted by lower finance income after a business partner settled a loan in the prior reporting period. Earnings and headline earnings per share were down by the same margin at 5c. Its net asset value per share rose 36% to 41.9c.

ISA had cash and cash equivalents of R53.3 million at the end of August, up 68% from a year earlier.

Its shares rose 5.1% to 82c in thin trade on Friday.

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