Horizon to take €2m hit in accounts on one-off items

Horizon Technology is set to take a €2 million hit in its 2005 accounts as a result of two one- off items, the company said yesterday.

Horizon, which works in systems integration and information technology products, said yesterday that it expected 2005 turnover and operating profit to be in line with market expectations when it publishes its accounts next March.

But in a statement, the Dublin-listed company said that its board expected to charge two exceptional items with a total value of €2 million to its 2005 accounts.

Its distribution division expects to refund about €1.2 million to a supplier to cover amounts that were incorrectly charged to that party in 2003 and 2004. The refund relates to amounts that were passed on to Horizon customers in the form of price discounts.

The other item relates to the group's property portfolio. Following the loss of a tenant in one of its leasehold properties in 2005, Horizon had to sub-let space to a replacement during the year. While it held sufficient rent deposits to ensure there were no bad debts, the vacancy period and the cost of rent-free incentives used to attract the new tenant came to €800,000.

Analysts are forecasting that Horizon's 2005 revenues will exceed €295 million. They are also predicting earnings before interest, tax and write-offs of €10.4 million and pretax profits of €7.7 million. Earnings per share should be in the region of 8.4 cent. In 2004, the group turned over €281.1 million and delivered an operating profit of €8.5 million. Earnings per share were 8.43 cent.

The company's chief executive, Gary Coburn, said Horizon had had seven consecutive periods of growth, and had continued to meet market expectations.

"The group is a strongly profitable, cash-generative group with sustainable competitive advantage," Mr Coburn said in a statement yesterday.

Horizon shares fell two cent to close at €1.26 on the Dublin market last night, after 10,300 shares in the company were sold.