UCS restructures for more growth

Johannesburg, 28 Nov 2007

JSE-listed investment holding company UCS says it will once again restructure its businesses.

The move is aimed at leveraging opportunities in local and international markets, says group CEO John Bright.

The company, which yesterday posted stellar results for the year ended 30 September, has restructured several times in the last few years as it made new acquisitions.

"UCS has traditionally split its interests into software, and solutions and services. Even so, there have been changes, as we`ve tried to get the best margins from the many purchases we`ve made. This year we also unbundled the product side of our business into a new company named Argility," he says.

The company has plans in place to restructure its businesses into three divisions: retail solutions, infrastructure and investments.

"This move will enable us to build margins through efficiencies brought about by grouping business units with similar focus and expertise. On the retail side of the business, it will also mean that the management team can be charged with making our international expansion work," explains Bright.

Seeking other shores

To fast-track this international expansion, UCS has signed agreements to acquire supply chain solution provider Aquitec. The deal, which still requires approval from the South African Reserve Bank on the offshore investment, will cost UCS $6 million (R42 million).

Bright explains this acquisition not only offers intellectual property, but an entry into the UK and US markets.

"Aquitec gives us immediate skills on the ground in two markets, which are of great interest to us. It also gives us an entry point into their customer base. The company hasn`t performed as well as it could have in the past, I believe we can change this," he says.

In addition to the Aquitec deal, Bright says the company`s second entry into the US market on the back of global software vendor SAP is proceeding well.

"This really is an exciting opportunity for us. We already have 1 600 qualified prospects waiting in that market for our SAP retail solution," he explains.

Local still lekker

Although Bright sees a significant portion of its future growth coming from its international strategy, SA will always be home, he says.

"The US and UK markets by their sheer scale mean that there are more opportunities available to be had. Nevertheless, we built our business in SA and intend to keep our local operations strong," he comments.

SA will also be the delivery base for many of its services, Bright adds.

"We are perfectly positioned to be able to provide quality services from SA as an offshore location while still maintaining a customer-facing presence in each region. For customers it`s the best of both worlds. For us it means we can improve our profit margins through better scales of economy and lower costs of operations."