ANDRÉ FOURIE There is solid and growing demand for Poynting’s defence equipment, as militaries integrate the equipment into their systems
Local antenna manufacturer Poynting Holdings reports high growth for its defence equipment order book, offset by losses in other divisions, and notes that about 68% of its earnings stem from exporting equipment mainly to developed markets, says Poynting CEO Dr André Fourie.
Poynting’s interim results in March show that revenue increased by 27.4% to R53.5-million, earnings per share increased 68.4% to 4.11c and profit increased by 68.7% to R3.78-million.
Further, the company acquired digital television transmission infrastructure company Aucom and the earnings from Aucom will be included in its full-year results.
Although the defence division posted profits of R9.9-million, the commercial, cellular coverage solutions and new business divisions registered losses of R2.1-million, R3-million and R1-million respectively. Although the Commercial Division is showing the benefits of mass production in China, the restructuring of its sales channels and production facilities in China has negatively impacted on profitability. These disruptions are now largely complete and better performance is expected in the second half.
“It took many years to get our products accredited and approved for military and defence systems, but the dividends are evident. The defence division doubled the size of its order book during the past six months and fulfilled most of its existing orders. This shows that there is solid and growing demand for our defence equipment, as militaries integrate the equipment into their systems,” says Fourie.
The defence division focuses on manufacturing electronic warfare, monitoring, jamming and direction-finding equipment, with 98% of the equipment being exported through special distribution partners.
Poynting has also gained entry into the military communications market with its Radiant Antenna, which is a much larger market than the electronic warfare market, he adds.
The company has improved its cash reserves by 224.7% to R36.9-million and the tangible net asset value a share has increased 76.9% to 62.5c between December 2012 and December 2013.
Meanwhile, the group designs and manu-factures cellular telephony antennas and base-station transmission equipment. South Africa will require a tenfold increase in its base stations to meet demand for mobile connectivity within ten years. The cellular equipment it manufactures includes high-bandwidth, small-cell long-term evolution (LTE) base-station equipment and telecommunications equipment placed underground to prevent vandalism and theft.
However, the LTE base stations and digital television markets require the reallocation of the communications frequency spectrum, which has languished in policy uncertainty for several years without resolution, despite sectorwide lobbying.
“Digital television requires that neighbouring countries also switch to digital television streaming more or less simultaneously; hence the global goal of switching to digital television in 2015. “The roll-out is significant and in some instances an extension may be sought, says Fourie.