JSE-listed Business Connexion (BCX) says its year-end results did not live up to its expectations as the ongoing challenging economic environment took its toll.
The company this morning released results for the year to August and reported a 6.3% gain in revenue, to R4.3 billion. However, its recent acquisitions of four UCS companies and a majority stake in Canoa accounted for R489.3 million of its turnover gains.
BCX said it would buy Accsys, CEB Maintenance Africa, Destiny Electronic Commerce, UCS Solutions and UCS Technology Services for R614 million from UCS. It subsequently sold Destiny to VeriPhone for R255 million.
It acquired a majority stake in managed print solutions group Canoa, in June.
BCX reported lower headline earnings, which slumped from R124.2 million a year ago to R57.5 million. Headline earnings per share also fell, from 47.6c to 17.3c.
CEO Benjamin Mophatlane says the results did not meet management's expectations. However, he says the company has seen results from recent acquisitions and its services unit.
The major let-downs came from its technology unit, at which the company has replaced the entire management team, and from specific divisions within its innovation sector, says Mophatlane.
Mophatlane says spending has slowed down in the corporate and government sector. State spending has been “disastrous” and almost non-existent.
However, BCX has taken corrective action and is now positioned for the “tough times” ahead, he notes. The company has restructured its management and now has a dedicated head for both the corporate and public sector, he adds.
During the year, BCX retrenched about 50 staff members, which resulted in a once-off cost of R47.2 million, which weighed on its operating margin.
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