Our opinion on the current state of ISA Holdings (ISA)

ISA Holdings (ISA) is a small Alt-X listed IT company that operates in sub-Saharan Africa, specializing in network, internet, and information security. The company is recognized for employing some of the leading IT security specialists in the region and boasts a robust set of tools and experience to deliver effective information security solutions.

In its financial results for the six months ending on 31st August 2023, ISA reported a significant turnover increase of 42% and an earnings per share (EPS) increase of 27%. The company noted, "Profit before other income and expenses increased by 22% during the current reporting period to R23.1 million, representing a gross margin of 47% compared to 55% in the prior reporting period."

Looking ahead, in a trading statement for the year ending on 29th February 2024, ISA estimated that headline earnings per share (HEPS) would increase by between 25% and 45%. This projection underscores the company's ongoing profitability and resilience, despite recent challenges.

However, a potential issue for investors is the limited liquidity of ISA's shares; with only about R36,000 worth of shares traded on average each day, it can be risky for private investors to acquire a significant stake. Nevertheless, with a price-to-earnings (P/E) ratio of 11.21 and a dividend yield of 7.14%, ISA's shares appear to offer good value, attracting those looking for investment opportunities in the IT sector.