London-listed IT distributor Fayrewood, in which Irish businessman Mr Pierce Casey has a stake, continued to buck the trend in its sector yesterday by posting record results for the six months to June 30th.
The company posted a 50 per cent-plus rise in pre-tax profits to €7.3 million at end-June from €3.6 million at the same time last year.
Adjusted earnings per share jumped by a similar amount to come in at 6.1 cent, compared with 4 cent last year.
Sales grew by 8.1 per cent year-on-year from €264.7 million to €286.2 million. The biggest contributor was Fayrewood's niche business, which distributes computers and computer peripherals in France, Spain and the UK. This generated €203.7 million in turnover.
The more specialised Computerlinks operation, in which Fayrewood has a 51 per cent interest, added €82.5 million. However, Computerlinks accounted for a greater share of gross operating profit: €4.75 million as opposed to €4.3 million for niche distribution.
Mr Casey, who chairs the company, said yesterday that Computerlinks delivered higher margins because it deals in specialised e-security and e-business software, which requires considerable investment from purchasers.
Computerlinks distributes across the EU.
Mr Casey attributed the growth in profitability to an improvement in gross margins and cost control.
Margins were boosted by the fact that the two businesses' leading positions in their respective markets allowed them to get better terms from suppliers, he said. The group wanted to develop both divisions to the point where they would make equal contributions to operating profits, Mr Casey added.
Fayrewood also announced that it placed just over 2.3 million shares, or 5 per cent of its ordinary share capital, with institutional investors. The move raised €2.3 million for the group, and the cash will be used to expand its UK operation.
The directors subscribed for a total of 553,826 shares, or 24 per cent of the total placement. Mr Casey's tranche of 181,159 brought his holding to more than 4.4 million shares, or 9.1 per cent of the company. Board member Mr Mario Legorburu, was allotted 234,555 shares, bringing his stake to 4.9 million or 10.1 per cent.
Mr Casey said the group's brokers asked the board to place the shares after their price quadrupled in the space of nine months. The stock was trading at around 65p yesterday afternoon.
The company's last annual general meeting gave the board the power to issue up to 5 per cent of its share capital during the year.
Fayrewood is listed on London's alternative investment market. Computerlinks has a separate listing in Frankfurt.
