Jade Software's outlook dims after good first-half

BY TINA LAW

Jade Software Corporation has posted a 32 per cent jump in first-half profit, but is warning its annual profit will be down on the previous year.

The Christchurch technology company yesterday reported trading income grew 3.2 per cent to $23.9 million in the six months to June 30, from the same 2008 period. The pre-tax profit rose 30.8 per cent to $1.7m.

The net profit was up 32 per cent to $1.1m.

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

Profit before interest, tax, depreciation and amortisation rose 9 per cent to $4.8m.

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

He expected the annual result to be down on 2008.

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

Richardson said it was too early to say just 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 Jade's revenue was from the financial services sector and nearly 20 per cent was from logistics.

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," Lindsay said.

Richardson said Jade saw the downturn coming and had planned for it as best as it could.

However, the impact on Jade 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.

Richardson said 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'."

In June, Jade announced shipping company Messina Line had selected Jade Master Terminal technology to manage cargo movements at its terminal in Genoa, Italy.

"Terminal operators now recognise JMT as a genuine challenger to established products."

The company was pursuing strong leads in Europe, the Middle East and the Americas for the cargo technology.

- © Fairfax NZ News