Technology distributor Alviva Holdings (formerly Pinnacle Holdings) has reported headline earnings per share of 243.9c in the year ended 30 June 2017, up 23.3% from 197.8c a year ago.

Despite “difficult market conditions”, net profit rose by 16% to R444m, while core earnings per share were up 25% to 256.3c. However, it warned that there is little prospect of economic improvement until after December, when the ANC holds its elective conference.

Revenue came in at R12.8bn, up 16.8%, from R11bn previously. ICT distribution made up the bulk of revenue, at R9.5bn, with services and solutions contributing a meaningful R3.5bn.

Cash generation was strong, up 70% year on year at R1.3bn.

The acquisition of IT services company Datacentrix was included in the results with effect from February 2017, which contributed positively to the numbers.

“The strategy to diversify the group’s business from that of predominantly distribution is bearing fruit, with the contribution from the services and solutions cluster becoming more significant,” it told shareholders.

“In addition, the focus on delivering profits into cash has transformed the gearing of the group and allowed us to make substantial investments while maintaining dividend payments.”

Distribution margins were improved due to better management of inventory throughout the period, it added. Datacentrix had “a great year and executed several big contracts”.

Contracts

“The roll-out of the upgrade of the courtrooms with the department of justice, involving some 3 200 courtrooms throughout the country, has been taxing, both logistically and administratively, but is now close to conclusion. In addition, Datacentrix has completed technology upgrades in several countries for Barclays Africa.”

It said the acquisition of renewable energy specialist Solareff is also paying dividends.

The board has declared a final dividend of 25c (2016: 20c) per ordinary share.

Alviva warned that the overall economy “faces challenging times” and it is “evident that, following the cabinet reshuffle in March 2017, households have been actively shoring up their balance sheets, reverting to a culture of saving and living more within their means”.

“Businesses, too, have curtailed investment and are not as yet utilising the low interest rate environment to leverage up their balance sheets, meaning that conservatism is dominating economic behaviour at the moment.

“There is simply no confidence to encourage investment. We believe this to be temporary in nature but anticipate a tough six to nine months ahead.”

It said much will depend on the outcome of the ANC’s elective conference in December.

However, with a “rejuvenated balance sheet”, group said it is keen to expand its offerings through acquisitions.