Horizon Technology Group has reported its first full-year increase in turnover since 2001, which it says indicates that the industry has turned a corner.
The Irish tech services reported turnover growth of 12.3pc to €281m and a gross profit of €32.6m, up 13pc on last year.
It described growth during 2004 as primarily organic, achieved principally through market share gains in an environment of modest recovery and intense competition where corporate customers of the company maintained their cautious approach to IT capital expenditure. The company said it benefited from the strength of the Irish economy and the growth of its enterprise applications and services business.
Operating profits have grown concurrently in each of the past three years and operating profit in 2004 was €7m, up 37pc on 2003 and 77pc on 2002. The company’s operating margin in 2004 was 2.5pc, up from 2pc a year earlier.
The company said that the weakening of the US dollar by 30pc to the euro between 2003 and 2004 is a trend likely to continue and will continue to influence the PC and server markets. Industry unit volumes, Horizon says, have grown to compensate and in 2004 unit volume growth was in the order of 20pc to 25pc. Industry analysts expect that unit growth will offset unit price depreciation in the foreseeable future.
The company said that market demand for software and consulting services strengthened during 2004, with some evidence of large corporate customers beginning to invest for growth, particularly in the telecoms and finance sectors. The company said it benefited from this trend, particularly in application development and SAP implementation projects.
Horizon’s directors anticipate that while overall market turnover will be hampered by unit price depreciation, the measured market recovery experienced in 2004 will continue. It said that while growth in 2004 was attributable to market share gains, future turnover growth will be more reliant on market growth rates and the pace of organic development.
Commenting on the results, Horizon chairman Samir Naji said: “Our exposure to the Irish economy, where we generate 52pc of turnover, has been a significant strength during 2004 and is expected to prevail in 2005. Horizon’s strategy is to continue as a broad-based supplier of IT products and services within the Irish market.”
By John Kennedy
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