Jade up 32pc but expects downturn

Jade Software Corporation has posted a 32 per cent rise in first-half profit but warns its full-year profit will be down on the year before.

The Christchurch technology firm reported yesterday operating income grew 3.2 per cent to $23.9 million in the six months to June 30, up from $23.1m in the same period last year.

Profit before tax was $1.7m, up from $1.3m the same period last year.

Profit after tax was up 32 per cent from $876,000 to $1.1m.

Chief financial officer David Lindsay said profit growth for the first half could be attributed to operational improvements and careful management of costs.

Profit before interest, tax, depreciation and amortisation was $4.8m, up 9 per cent from $4.4m during the first half last year.

Chief executive Craig Richardson said despite a good performance in the first half, Jade was not immune to the adverse global conditions.

He expected the full-year result to be down on 2008.

Jade generated $50.8m in revenue and posted a net profit of $3.7m for the year ended December 31, 2008.

Mr Richardson said it was too early to say by how much revenue or profit would be down for the full year. It would depend on sales of its licensed products to the financial services sector, which had taken a hit in the downturn.

Last year 25 per cent of revenue was from the financial services sector and nearly 20 per cent was from logistics.

Mr Lindsay said its European logistics customers were reporting up to a 60 per cent reduction in cargo movements and there had been unprecedented conditions in the banking, finance and insurance industries.

"We are expecting this to be reflected in our year-end result," he said.

Mr Richardson said Jade foresaw the downturn and had planned for it as best it could. However, the impact on the company had not been as bad as he thought it could have been. Jade had managed to retain all its key customers, remain profitable and keep its staff.

He was seeing some signs of a recovery that he did not expect to see until early 2010.

"We are finding a number of existing customers are coming to us and saying, `we need to innovate, we need to find a different way of doing things'."

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