Poynting, which makes antennas and telecoms products, is also engaging with several potential takeover targets locally and internationally. Its aim is to secure a European or US footprint to support its defence product range and continue growing its European customer base for its commercial unit, as well as identify companies that fit its market profile.
The listed company notes of the revenue it received in the year to June – R132 million at 47% higher year-on-year – the bulk was earned outside of SA, as export revenue gained 71% year-on-year.
Poynting's Aucom unit reported a full-year profit of R13.7 million, beating the R11 million profit target. However, because Poynting issued shares to pay for the deal, and then saw its stock surge from 75c to 271c, Poynting had to make an accounting adjustment.
It explains the increase in the value of the 66 million shares it issued for Poynting gave Aucom an "unrealistic" value of R178.9 million, so it had to impair the unit by R95 million. As a result of the accounting issues, the deal Poynting did – on good terms – led to "unrealistic accounting losses and a balance sheet which does not accurately reflect the financial position of the group," despite the unit's profitability.
Aucom provides products, system integration, and implementation and commissioning services to broadcast and telecoms markets.
Thanks to Aucom, Poynting's digital TV unit did better than expected, and the listed company notes market conditions to roll out digital TV infrastructure in Africa remain "robust". Its defence division also performed well, growing after tax profit 74% year-on-year.
CCS, a start-up unit, is seeing increasing interest for its subterranean base stations, which Poynting says was a "product ahead of its time", as major cellular operators have only recently expressed interest. It notes continued product investment has led to a R4 million loss.
Further development will be limited and product completion will be based on confirmed orders, notes Poynting. However, it is hopeful of benefitting from the City of Johannesburg's decision to allow cellular companies to use street poles as base stations.
The group added its commercial unit, which restructured its local sales channel, saw revenue decline 10% and the relocation of production to China took up management time and led to increased costs and stock write-offs.
Poynting says the unit will focus on growing revenue and sales.