TORONTO, June 29, 2016 /CNW/ - Cencotech Inc. (CTZ – TSX-V) today reports the results of operations for the first six months and the second quarter of fiscal 2016 ended April 30th. All amounts referenced herein are in Canadian dollars. Revenue for the second quarter was $561,021 as compared to $452,622 for the same period last year. Net income before tax for the quarter of $163,536 ($0.01 per share) was recorded as compared to $155,555 ($0.01per share) for the three months ended April 30th, 2015.
Revenue for the first six months of fiscal 2016 was $1,056,308 as compared to revenue in the same period last year of $799,194. The Company recorded net income before tax of $416,616 ($0.02 per share) in the six months ended April 30th, 2016 as compared to $388,311 ($0.01 per share) in the same period last year.
The Company has chosen to compare year over year Comprehensive Income before taxes because the Company is not yet taxable due to losses in previous years. In fiscal 2015, with the concurrence of the Company's auditors, the tax loss carry forwards were assigned a present value and capitalized in the Company's accounts. Fiscal 2016 Comprehensive Income reflects the taxes which would have been payable had the Company been taxable. The tax amount for each period is in turn charged against the capitalized tax asset. Prior to the capitalization of such losses, the accounting protocol assumed no taxes were payable. For comparison purposes, therefore, Comprehensive Income before taxes is the appropriate metric.
As the bulk of the Company's sales are in US dollars, fluctuations in the exchange rate between Canadian and US dollars impact reported income. Revenues are converted to Canadian dollars when sales are completed and booked. Foreign exchange adjustments are then required when payments are actually received. This foreign exchange adjustment negatively impacted stated Comprehensive Income in the Quarter ended April 30, 2016 by $67,076. However, for the six month fiscal period the foreign exchange loss was only $11,467. This compares to fiscal 2015 foreign exchange losses of $31,955 for the quarter and a gain of $51,329 for the 2015 fiscal half year.
The consolidated financial statements and Management's Discussion and Analysis for the fiscal quarter ended April 30th, 2016 are available under the Company's profile on SEDAR at www.sedar.com.
K. Barry Sparks, the President of the Company stated: "The Company is continuing to make progress in moving new product sales opportunities forward, particularly with respect to its Cirreon SaaS and related software offerings. New customers are increasingly requesting that products be offered on a "software as a service" basis (SaaS), as opposed to purchasing a term licence for such software from the Company. While as noted previously, this reduces the recording of one time larger licence sales completions, the Company is completing more deals on a contracted 'pay as you go' usage basis. Total recurring contracted software revenue accounted for in excess of 73% of total sales in the quarter ended April 30, 2016.
As noted earlier, Management's challenge for the Namsys team is to continue to grow distribution. Management are working diligently to assist existing distributors to expand the use of our products in their networks and at the same time are initiating new distributors to offer our products through their networks. The Company expects to continue to make strides in achieving greater revenue and higher profits in 2016 and beyond."
Cencotech Inc. products are designed to bring efficiency to the processing of currency and other value instruments in financial institutions, large retailers, public transportation operations and the gaming industry. Cencotech's proprietary software products for this market are "open-architectured" and have been developed to interface with clients' legacy systems.
The TSX Venture Exchange has neither approved nor disapproved of the information contained in this release. This Media Release may contain forward-looking statements, which reflect the Corporation's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ from those projected herein and depend on a number of factors including the success of the Corporation's sales strategies.
SOURCE CencoTech Inc.
For further information: Mr. K. Barry Sparks, President, (416) 369-6081, mailto:email@example.com