Datatrak Holdings plc published its interim results to 30 June 2008 following a Board of Directors’ meeting held on 26 August.
During the first six months of 2008, Datatrak’s turnover rose by 10.3% to €1.6 million compared to the same period last year on account of increased hardware sales in the UK through Datatrak IT Services Ltd. Moreover UK revenues, which continued to grow especially through Datatrak On-line, were negatively impacted by the strengthening of the euro against the Sterling. Full operations in Italy started in January this year and a number of clients, namely ACS, IB Services and Poste Nazzionale Private, have already been signed up for DispatchIT. Furthermore a number of try-to-buy pilots for DispatchIT and TrakIT are also active. Turnover does not yet include revenues from Holland and Spain as Datatrak is still seeking ways of penetrating these markets. In Libya, Datatrak managed to sign a client for the use of its GPS/GPRS service. Locally, the Group managed to increase its sales levels with the most significant being that of a 5 year contract to provide tracking services for 200 Enemalta Corporation vehicles and the renewal of the service agreements in relation to Law Enforcement. Notwithstanding this, prices and fees in relation to the sale and leasing of tracking equipment and vehicle tracking services were adjusted downwards due to market forces.
Direct costs and changes in inventory both increased substantially to €364,787 and €47,615 respectively. Wages and salaries grew by 19.3% to €585,320 in the first half of 2008 due to the strengthening of the IT compliment within the Group to better service both local and international clients. On the other hand, marketing costs declined to €58,229 from €130,741 in the first six months of 2007. Other operating expenses also decreased by 3.8% to €209,736. As a result total operating costs registered a 10.8% rise to €1.3 million.
This resulted in earnings before interest, tax depreciation and amortisation (EBITDA) of €337,052, 3.8% higher compared to the figure of the first six months of 2007. After accounting for depreciation, amounting to €391,892, the Group registered an operating loss of €54,840 (June 2007: loss of €35,590).
Net financing costs decreased by 20.2% to €61,756 resulting in a pre-tax loss of €116,596 which is 10.2% lower than the pre-tax loss registered in the first six months of 2007. After accounting for a minimal tax charge the Group recorded a net loss of €116,731, 34% lower than the net loss registered in the half year of 2007, representing a negative earnings per share of €0.004. The Directors mainly attribute this loss to one-time costs in respect of the ongoing restructuring process which was approved by shareholders in the Extraordinary General Meeting held on 4 April 2008.
This restructuring process is aimed at refocusing the Group’s core strategy towards ICT whilst re-grouping other activities as complementary business units. Moreover, the Directors expect to formally launch the three new business units (ICT International Projects, ICT Solutions and Business Consultancy) in the second half of 2008.
Total assets as at 30 June 2008 amounted to €8.38 million representing a 1.58% decline from the value recorded in December 2007. Shareholders’ funds decreased by 3.49% to €4.7 million compared to the €4.87 million figure as at December 2007 as a result of the recent write-offs of accumulated losses. Based on the total number of shares in issue of 31,899,000, Datatrak’s net asset value per share is of €0.149.