Zamano, a Dublin-listed app developer, saw profits fall by 30 per cent in the first-half despite sales jumping 80 per cent.
The company said pretax profits fell to €794,000 as against €1.14 million for the same six-month period a year earlier as sales rose to €18.7 million from €10.4 million.
The profit decline is believed to be due to lower yield markets and increased spending on advertising and marketing.
Gross profit fell by 9.7 per cent to €2.3 million from €2.5 million while adjusted earnings before interest, tax, depreciation and amortisation (ebitda) was down 13.1 per cent to €1.19 million, versus €1.37 million in the preceding year.
“While the overall trading outcome for the business was somewhat mixed during the first half, we can report a significant increase in both sales performance and cash generation. This was offset by falling margins due to increased investment in advertising, a changing sales mix in the UK and some foreign exchange headwinds,” acting chairman Colin Tucker said.
“We anticipate an improvement in operating performance during the second half thanks to the first half advertising spend and continuing strong UK sales performance,” he added.
Zamano’s balance sheet continued to improve in the first-half with cash of €7.4 million at the end of June. This marks a 36.7 per cent increase compared to the same period a year earlier when the company had €5.4 million in cash.
The group, which was the target of a failed takeover bid late last year, said earlier this month that it was focusing on a number of acquisitions in the coming months following a strategic review, which concluded that the firm needed to shift to higher value-added activities.
Mr Tucker said the near 40 per cent jump in the group’s net cash position would provide it with a “solid platform” to implement its acquisition strategy.
“With an active focus on M&A [mergers and acquisitions] activity, we believe that Zamano can achieve one of its core strategic objectives by pursuing higher value-added business which we expect would open avenues for growth in the coming 12 months,” he said.
“Our ambition to achieve this strategic repositioning will run in tandem with adapting and optimising our existing business lines. In addition, we will continue to focus on delivering strategic acquisitions and we hope to make significant progress in this regard during the second half of the current financial year,” Mr Tucker added.
