TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      Rain in embarrassing climbdown over Telkom statement

      16 August 2022

      Coal miner Seriti plans R12-billion Mpumalanga wind farm

      16 August 2022

      Signal warns attackers may have made off with users’ phone numbers

      16 August 2022

      South Africa’s ‘silent revolution’ as those with cash go solar

      15 August 2022

      SA coal giant Seriti Resources in pivot to renewables

      15 August 2022
    • World

      Semiconductor boom turns to bust

      16 August 2022

      Tencent plans to offload R400-billion Meituan stake: sources

      16 August 2022

      Ether leaps higher on verge of Merge

      16 August 2022

      Institutions eye crypto but retail investors remain nervous

      15 August 2022

      Tencent woes mount, even after $560-billion selloff

      12 August 2022
    • In-depth

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Africa Data Centres
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»In-depth»Streamlined Faritec looks to put disastrous year behind it

    Streamlined Faritec looks to put disastrous year behind it

    In-depth By Editor23 September 2009
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    Fanie van Rensburg
    Fanie van Rensburg

    Faritec has pulled itself back from the brink of financial ruin and should break even or even post a small profit in its 2010 financial year. But more cost cutting may be necessary to get there.

    That’s the word — and warning — from newly appointed Faritec CEO Fanie van Rensburg after the JSE-listed technology company turned in results for the year to June 2009 that were stained in red ink.

    In what management has described as a “difficult and disappointing chapter” in Faritec’s history, the company lost R124m in the past year, from a profit of R29m in 2008. Revenue fell off a cliff: down 30% in the period to R727m as demand for hardware and software plummeted.

    Unlike many other listed IT companies, Faritec has been particularly exposed to the recession-induced slump in demand for hardware and software; services-based sales, which have held up well, make up less than a quarter of its revenue mix.

    Non-recurring costs added to the financial bloodbath. Downsizing cost the company R10m, bad debts and provisions for doubtful accounts receivable another R26m, interest charges of R11m, and an impairment charge on goodwill set it back another R31m.

    Chris Jardine
    Chris Jardine

    Van Rensburg warns that conditions are likely to remain tough, but says that management is focusing all its efforts on the bottom line so as to turn a small profit in 2010. Key to this will be a continued focus on cost cutting and efficiencies and on improving the company’s sales proposition.

    Faritec chairman Chris Jardine says the company got into trouble because it did not act quickly enough to deal with the sudden downturn in the economy. It had high fixed costs, which took time to remove from the system.

    The company says the worst of the pain is now behind it. Headcount has been reduced from 560 to 400. And, year on year, costs are down about R7m/month.

    Further cost cutting is planned, but no further retrenchments are on the cards for now, Van Rensburg says.

    Debtors’ days have been reduced to 57 days from 106 days. But debt is high, with gearing at a ratio of 92%. However, the company says its debt situation is manageable.

    Faritec, which is now controlled by unlisted IT group Shoden Data Systems following a rights offer, has appointed highly respected IT industry executive Dan McMahon to head its sales operations.

    Van Rensburg, who was previously Shoden Data Systems’ CEO before taking the reins at Faritec from former CEO Simon Tomlinson, says part of the recovery plan for Faritec involves offering more holistic solutions to its clients, a process McMahon will help drive.

    Other big shareholders in Faritec include black-owned investment company J&J and black-owned IT company Cornastone, which together hold just under 30% of the company’s equity.  — Duncan McLeod, TechCentral

    Chris Jardine Fanie van Rensburg Faritec
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleIs Google bad news for news?
    Next Article IBM, Shuttleworth take aim at Microsoft in Africa

    Related Posts

    African unicorn Flutterwave battles fires on multiple fronts

    11 August 2022

    The length of Earth’s days has been increasing – and no one knows why

    7 August 2022

    As Facebook fades, the Mad Men of advertising stage a comeback

    2 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    HPE SimpliVity: addressing SMBs’ data conundrums

    16 August 2022

    Digital transformation – don’t get caught unprepared

    16 August 2022

    Seven reasons your business needs IP surveillance cameras

    15 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.