Robust cash flow helps Horizon to eliminate debt

Robust cash flow allowed technology firm Horizon to eliminate net debt from its balance sheet in 2002, according to full-year results issued yesterday.

The company generated cash of €40 million last year, making it cash positive by €5.1 million.

The debt shift, which beat most analysts' expectations, pushed the company's shares up by 25 per cent last night to close at 35 cents.

Horizon's 2002 results were broadly in line with guidance issued by the company in December.

The company's pre-tax losses fell to €12.5 million from €16.5 million in the year to June, 2001, the last comparable accounting period.

Turnover fell by 22 per cent to €321.4 million, reflecting a radical restructuring of Horizon's operations which has seen it concentrate on four core businesses and exit a number of others.

Horizon chairman Mr Samir Naji said the firm had reached "a notable turning point". He described Horizon as a company "ready to take advantage of any future upturn in market conditions", but cautioned that "IT spending shows no sign of improving".

Horizon has cut its quarterly running costs from €17 million in 2001 to about €5.5 million currently. Staff numbers have fallen from 720 to 208.

Mr Naji said the company's pre-tax performance had been hit by a loss on the disposal of a training and consulting business and exceptional expenses attached to the reorganisation of activities.

Merrion Stockbrokers retained a "buy" forecast on the stock after the results yesterday, describing the company as "fighting fit". It no longer views Horizon as a financial risk, but acknowledges that an earnings risk remains.