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Business Connexion bolsters income

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 16 Apr 2015
Under CEO Isaac Mophatlane, Business Connexion has bolstered revenue 16% in the first half of the year.
Under CEO Isaac Mophatlane, Business Connexion has bolstered revenue 16% in the first half of the year.

Business Connexion (BCX) grew revenue 16% in the first half of the year, despite the fact it is the subject of a R2.67 billion buyout offer from Telkom.

The listed company said this morning that income in the six months to December grew 16% to R3.6 billion, a gain that was underpinned by organic revenue growth of 15.1%, which it says came from new client wins.

"This trend continues to reflect the group's focus on an improved sales culture and cross-selling."

However, Business Connexion notes its gross profit margin dropped to 27.4%, from 30%, a margin it says remains "largely unchanged despite continuing tough economic conditions as well as market and client pricing pressures".

The listed group says its focus on operating expenses and balance sheet management has continued, as its normalised operating expenses are flat and its capital expenditure has been trimmed.

BCX also recorded a normalised operating profit margin of 5.6%, which was a year-on-year gain on last year's 5.2%. Earnings per share came in at 17.6c, down from 52c last year, while diluted earnings per share came in at 17.7c, up from 15.6c a year ago.

However, stripping out the sale of QLink and the impact of the amortisation of intangibles, BCX's actual headline earnings per share is 25.9c, compared to 20.7c a year ago. BCX's operating model now comprises:

* The Solutions and Service Delivery division, which includes what was previously known as Services, UCS and Innovation.

* The Technology and Sourcing division comprising the Technology and Canoa businesses.

* The Investments division, which is made up of the group's strategic investments, including its investments in Nanoteq, African Ar^ete, Appzone and Northgate Arinso.

BCX notes the "fundamental shift" to the cloud and the Internet of things, as well as the requirement for analytics, mobility and security, presents opportunities for the group.

In addition, BCX's mergers and acquisition strategy is focused on the rest of Africa. "The acquisition of innovative solutions will ensure Business Connexion is positioned to play a leading integration role in the Internet of things."

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