It is with great pleasure that we announce sterling growth for the sixth consecutive year. For the year ended 30 June 2007, DigiCore recorded 37% growth in earnings per share, a remarkable achievement for a group still building new markets. Equally, the 36% increase in revenue is proof of our world-class products and services, now delivered to 32 countries. During the review period, we also secured tenders from several blue-chip companies, including BHP Billiton and the South African Police Services, to be delivered during the coming year.
Revenue rose by 36% to R440,6 million (2006: R323,2 million) while operating profit increased by 44% to R135 million and margins remained stable.
Earnings per share increased 37% to 44,4 cents for the period from 32,3 cents. Headline earnings per share rose to 44,1 cents from 31,9 cents, a 38% improvement.
Our cash balance reduced slightly to R59 million mainly due to increased tax and dividend payments, and the need for more working capital to fulfil large orders received in June and only expedited in July 2007.
Trade receivables increased to R146 million mainly due to record sales performance in June 2007 while inventories increased by R23 million in anticipation of several large orders.
We finalised negotiations to acquire the remaining 49% stake in DigiCore Europe BV in May 2007 at a price/earnings multiple of 8.5. Accordingly, effective 1 January 2007, 100% of DigiCore Europe was consolidated in the results for this year.
We have maintained or grown our market share in most of the countries in which we operate.
In South Africa, we are entrenching our position as the service provider of choice, building relationships and supplying superior technology at an unprecedented rate.
Among others, we successfully installed over 5 000 units for eThekwini (Durban) Municipality, resulting in more efficient control, service delivery and cost savings for them.
The fleet services part of our business has increased income from our management information bureau, cellular, product servicing and software licensing by 36%, primarily annuity based income. Our Customers for Life strategy has also been successfully expanded to Europe and other countries.
Our international expansion strategy is producing excellent results:
C-track South Africa had a very successful year and produced a profit while spending approximately R10 million on brand building and advertising. Our marketing campaign, bundling navigation and in-car DVD systems with the C-track Secure product offering, is producing very encouraging results.
Relationships were built with motor dealers, insurance companies and brokers during the period.
Trakker Pakistan reached a new milestone with 50 000 installations earlier this year and growth of 31% in unit sales. This is currently our most successful SVR operation.
The relationship with our new empowerment partners is working well and has contributed to the success of our local fleet management business. In addition to equity ownership, we have made progress on the other pillars, supporting transformation in our business. The first two black women were appointed to the DigiCore Fleet Management SA board in September 2007.
Several of the large tenders we have been awarded will be rolled out over the next three years, giving us a higher level of guaranteed sales income than we have ever had before.
The full scope of these tenders does, in some cases, depend on the successful initial implementation of a few thousand units and achieving targeted goals and savings.
The rapid software development requirements of these tenders will continue to provide leading world-class solutions, further enhancing our opportunities to continue winning larger tenders worldwide.
Indications from several research companies point to exponential growth for our industry in the next five years and we believe we are well placed to capitalise on opportunities.
Prospects for the local stolen vehicle recovery market appear equally promising as customers realise the benefits of our superior products and services.
Owning 100% of our subsidiary in Europe will allow us to contribute to a planned strategic expansion programme in the area that should entrench us in the forefront of the automated vehicle location technology market.
With our ethical and service-orientated approach, we look forward to another successful year ahead.
Our appreciation goes to our customers, suppliers, distributors worldwide and our employees for an exceptional year. I have faith that we will take the group from strength to strength in years to come.