Horizon shares rise 25% on better-than-expected results

Shares in Horizon Technology jumped by a quarter to 25 cents yesterday, after the company unveiled better-than-expected results for the first half.

Revenues at the company fell by 14 per cent year-on-year but grew by 14.7 per cent when compared with the the preceding six-month period, reaching €193 million. Operating profit for the first half increased to €1.5 million, up from a loss of €14.1 million in the previous six months.

Company chairman Mr Samir Naji attributed the performance to "a comprehensive and radical restructuring" of the group's operations and cost base.

Since the start of the year, Horizon has been focusing on four business areas and has abandoned or disposed of non-core or unprofitable operations.

The group's running costs have been reduced from €17 million in early 2001 to €6.8 million, with staff numbers falling from 720 to 240. Horizon has also succeeded in slashing its debt by 90 per cent when compared with the previous half. Its debt stands at €3.3 million, down from €34.7 million.

Merrion Stockbrokers analyst Mr John Coolican said if current debt levels could be maintained, it would "significantly reduce the financial risk associated with the stock".

Horizon has posted adjusted earnings per share of 1.26 cents but, when discontinued activities are excluded, this rises to 3.45 cents, a level that it says "provides a solid base for future profitability".

In his chairman's statement, Mr Naji said Horizon was now operating in a "more competitive" market and the company must focus on aggressive pricing and cost-cutting.

Chief financial officer Mr Cathal O'Caoimh said that Horizon's "chances of survival" had changed dramatically after the restructuring. He acknowledged, however, that sales were likely to be "negative" for the remainder of the year, with technology spending not expected to pick up until "well into 2003".