Pre-tax profits of €686,000 for Horizon

REVENUES fell 22% at Horizon Technology last year, but the computer services company beat expectations with pre-tax profits of €686,000.

Operating profits grew 29% to €5.1 million, as the company’s restructuring efforts brought results by stripping out costs and exiting loss-making businesses. It wrote off more than e13 million closing down or selling off underperforming subsidiaries in 2002. Horizon’s Cork-born founder and chief executive Samir Naji said the results provided evidence of the company’s strength against a difficult market backdrop.

Staff costs plummeted by 23% to €12.9m during the year as the number of employees fell below 200. Horizon employed more than 600 people at its peak. Productivity improvements allowed the company to double its operating profit per employee to €25,200. Horizon’s distribution and channel services division, which distributes computer hardware under the Clarity Distribution brand, increased sales by 4% to €111 million. But enterprise services, the group’s other main unit that provides professional services and training and accounts for three-quarters of staff, saw sales collapse by 35% to e139 million.

Goodbody analyst Gerry Hennigan said total revenues were slightly lower than expected, but improved gross margins and continued cost containment were positive signs and contributed to the better than expected earnings figure.

Chief financial officer Cathal Ó Caoimh said Horizon was favourably positioned for a pick-up in the IT market. “With an improved cost base and a stronger balance sheet, it is better positioned today than at any other recent period to convert any upturn in demand to superior returns to shareholders,” he said.

It finished the year with net cash balances of €4.4 million.