The 2006 full year preliminary results of Datatrak Holdings plc were published following a Board Meeting held on 24 April 2007.
During the year ended 31 December 2006 the turnover of Datatrak Holdings decreased marginally to Lm1.4 million while costs fell by 8%. The preliminary report states that the fall in revenue was primarily caused by the disposal of subsidiaries that were no longer considered to be part of the Group. As a result, this restructuring exercise amounted to a cost of Lm58,000. The Group’s profitability improved significantly during the year, from a loss of Lm7,948 during the previous comparative year to a profit Lm57,416 in 2006. After accounting for tax income of Lm50,440 (2005: Lm11,335) profit for the year rose to Lm107,856 (2005: Lm3,387). It is important to note that the rise in profitability is mainly attributable to the strong operating performance of the 50% owned subsidiaries, Datatrak Solutions Limited (DSOL) and Datatrak IT Services Limited (DSERV). Both companies are responsible for the development of software and application service provisions such as the Local Enforcement System (LES) as well as providing mapping and surveying services. Since these subsidiaries are not wholly owned by Datatrak Holdings plc, the profits attributable to the other 50% shareholders of both subsidiaries amounting to Lm183,008 must be deducted from the consolidated profits of Datatrak Holdings plc.
After accounting for the profits attributable to minority interests of Lm183,008 (2005: Lm77,285), Datatrak Holdings plc incurred a loss for the period of Lm75,152. This translates into a loss per share of 0c5 (2005: 0c3) and represents a 1.7% decline from the previous year’s loss of Lm73,898.
The Balance Sheet as at 31 December 2006 shows total assets marginally higher at Lm5.15 million (Dec 2005: Lm4.95 million) and total liabilities at Lm1.8 million (Dec 2005: Lm1.65 million). This translates into net assets of Lm3.35 million and a net asset value per share of Lm0.21. Compared to the current share price of Lm0.27, the price to book multiple is of 1.28 times.
In the preliminary report, the Directors highlight the progress made on the negotiations between Datatrak Mena Limted and its Nigerian partners on the supply and licence agreement for the provision of networks in the region. The Directors explained that negotiations with the Nigerian investors are at their final stages and that a number of accomplishments were achieved in order to arrive at this stage. The achievements include: the granting of a frequency and operating license for the area by the Ministry of communications of Nigeria and the granting of exclusivity to market a datatrak network in West, Central and East Africa by Siemens VDO Trading Limited. Datatrak Mena Limted is in the process of reviewing alternatives in financing arrangements in relation to the project.
The Company’s auditors explain that the successful outcome of the Nigerian project will be crucial in determining the appropriateness of Datatrak Holding’s going concern. The Directors of Datatrak Holdings plc however state that in their opinion, the expected profits and cash flows that will be generated from the successful outcome of the project will be sufficient to meet the present and future commitments and liabilities of the Company.