Reduced costs earned a small pre-tax profit and helped to boost operating profit by 29 per cent at IT equipment and services provider, Horizon Technologies, the company said yesterday.

Horizon reported that turnover for the year to December 31st, 2003, fell 22 per cent to €250 million from €321 million the previous year. The company posted a pre-tax profit of €686,000, compared with a loss of €12.5 million in 2002. Operating profits increased by 28.6 per cent to €5.1 million from €3.9 million.

Looking at the divisional breakdown, sales in its distribution business improved almost 4 per cent to €111 million from €107 million. However, continued weakness in IT demand hit its enterprise solutions division (which supplies equipment and services), where revenues dropped 35 per cent to €139 million from €214 million.

The company generated €41.4 million in cash in 2003, compared with €38 million the previous year. However, its net cash position at the end of the year decreased by €900,000 to €4.4 million.This was largely down to the fact that it changed an agreement to buy out the minority shareholders in its subsidiary, Clarity Technology, during the year. Instead of issuing them with 4.4 million shares for their holding as originally agreed, the company instead paid €1.3 million in cash, issued them with 210,126 Horizon shares.

The company stated that this would reduce its year-end cash balance when it announced the alteration of the agreement last October.

The operating income growth was largely aided by a 17 per cent reduction in costs to €242 million in 2003 from €315 million the previous year. Earnings per share (EPS) came in at 0.46 cent, compared with a loss of 20.93 cent last year.

The company noted that customer enquiries were up during the initial months of the year, particularly from the telecoms and financial sectors. The directors said they anticipated a measured recovery in 2004.

Goodbody Stockbrokers analyst, Mr Rory Gillen, said the company's figures were better than expected. He said the brokers would be upgrading their forecasts for this year. The market also reacted positively. Horizon's shares closed at €1.03 in Dublin last night, an increase of over 21 per cent on its opening price of 85 cent.