Sebata suffers from government spending slowdown
The technology group, which services municipalities and the public sector, suffered a loss from continued operations of R123m
Technology group Sebata said on Friday that its continuing operations had swung into losses for the year to end-March, driven by a slowdown in government spending.
The company said revenue was up 6.432% during the year to R161.41m, from R151.7m in the previous year. That said, the company had a loss from continued operations of R123m, down from a profit of R179m previously.
The headline loss per share grew by 256.31% for the period from 30.19c in the previous year to 107.57c.
Basic earnings per share for the group were up 239.8% at 448.27c from 131.93c previously.
Sebata, which specialises in servicing the public sector, said it had “experienced an accelerated slowdown in government spending”.
“There is increased scrutiny on all public-sector spending as the government tries to reverse the endemic corruption South Africans have witnessed for a number of years,” the company said in a statement, adding that a number of its competitors “have been named recently in corruption investigations, but our strong ethical principles and governance ensured that we rather lost business than gain it through corrupt practices”.
“Secondly, the local economy is not growing and that is unlikely to change in the near term without a major co-ordinated effort by the government agencies — which is not visible at this time,” the company told shareholders.
Sebata has disposed of a number of assets in the last year.
In February, it sold Software Group Companies for R501.9m to Inzalo Capital Holdings in a bid to improve its empowerment credentials.
The deal saw Sebata selling a 55% stake in Software Group Companies, which is made up of Sebata Municipal Solutions, R-Data and MICROmega Accounting and Professional Services, which are all wholly owned subsidiaries of the company. A further 5% stake would be donated to Inzalo by Sebata.
A few months prior, Sebata announced the sale of a majority stake in its subsidiary The Water Group for R388.4m to the same buyer, for the same purpose.
Sebata did not declare a dividend for the 2020 financial year.
Shares in Sebata fell as much as 17.99% on Friday before paring the loss to 5.91%, ending at R3.66.
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