IT services company Phoenix IT Group Plc (PNX.L) Monday posted higher profit for the first six months of fiscal 2009, helped by lower costs, despite a fall in revenues.
Net profit for the six-month period was GBP 9.6 million, compared with GBP 8.3 million in the same period previous year. Earnings per share increased to 12.3 pence from last year's 6.8 pence.
Pre-tax profit totaled GBP 13.3 million, higher than GBP 7.5 million a year ago. The company attributed the increase in pre-tax profit to lower finance costs and no further non-recurring costs in the period.
UK- based Phoenix's underlying earnings per share rose 12.3% to 13.7 pence from 12.2 pence in the prior-year. Underlying profit before tax was GBP 14.8 million for the six months ended September 30, 2009, an 11.5% increase from GBP 13.2 million reported for the same period last year.
The company said the increase in underlying pre-tax profit was due to the increase in the Group's operating profit together with lower finance costs, which reflect a fall in interest rates and the decline in the average level of net borrowings period on period.
However, the company's half yearly revenues declined 4.5% to GBP 122.0 million from GBP 127.8 million in the same period last year. According to Phoenix, the decline in revenue was mainly due to lower net new annuity business in its IT Services and Servo divisions, together with lower contract renewals and delay in purchase decisions on prudent cost management efforts among customers.
While IT services segment's net sales fell 7.6% year-on-year to GBP 51.8 million, Servo segment revenues were down 4.7%, yielding GBP 44.1 million to total net sales. However, the company's ICM Continuous Business performed a shade better, yielding higher at GBP 26.1million, versus GBP 25.4 million last year.
The company also announced payment of an interim dividend of 2.15 pence per share to be paid on 6 April 2010 to shareholders on the register on 12 March 2010.
PNX.L last traded at 230 pence, gaining 4.55% on the London Stock Exchange.
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