Horizon beats forecasts to deliver €800,000 rise in profit to €3.3m

TECHNOLOGY company Horizon beat market expectations yesterday as operating profits for the first half of the year increased €800,000 to €3.3 million.

Sales were up 17% at €151m in the six months to June, while the company also tightened its grip on costs.

Chief financial officer Cathal O’Caoimh said the focus on efficiency and cost control translated a 10% increase in gross profit to a 32% hike in earnings before interest and tax.

Samir Naji, the Cork-born founder and chairman of the company, said sales growth was significantly ahead of the market and the company’s position in the market, solid financial base and relationships with key players in the industry all contributed to the improved performance.

Horizon gained market share in both Britain and Ireland. The company’s main operating divisions, IT consulting and hardware distribution, enjoyed similar performances with sales increasing by 16% and 19% respectively.

Mr Naji said the IT markets in Britain and Ireland saw the beginning of a “measured” recovery during the six-month period. He added that the group had been successful in its strategy of competing on both price and service to win business at the expense of competitors.

Goodbody analyst Gerry Hennigan said the results confirmed Horizon’s main markets were improving and the company’s outlook suggested the trends seen in the first half would continue throughout the rest of the year.

Davy analyst Brendan Quinn said the results were strong and compensated for the company’s relatively poor performance last year.

The company said its balance sheet remained strong but noted a €12m cash outflow caused by changed credit terms from the company’s suppliers. This meant Horizon paid its bills more quickly than last year, with the average bill being settled within 56 days, down from 70 days. The positive cash balance of €4.4m at the end of December was wiped out and replaced with debt of €8.1m at the end of June as a result.