African Cellular Towers expands scope

By Nicola Mawson, Contributing journalist

Johannesburg, 14 Feb 2007

Johannesburg-listed African Cellular Towers will expand its cellular offerings with a bid to buy another manufacturing firm.

In a note to shareholders yesterday, it said it had entered into an agreement to purchase JK Shelters (JKS), which manufactures and supplies shelters to the cellular phone tower market.

The company said the purchase would complement its current offerings. Africa Cellular Towers manufactures steel communication towers, portal factories, steel fencing, diesel and water tanks, solar structures and general steel engineering.

It is also involved in the management of telecommunications network projects, including GSM, fixed wireless and VSAT technology. It provides solutions or tower parts in Africa and other emerging markets, such as the Gulf States and India.

Revenue enhancement

From the beginning of next month, African Cellular Towers will acquire JKS for R40 million, which is based on it achieving an after tax profit of R8 million for the 2006 financial year.

In its pre-listing statement before its listing in November, it said its 2006 revenue to end-February was R129 million, while its gross profit was R47.9 million.

The company forecast revenue of R157 million by the end of the next financial year, while gross profit is expected to move up to R53 million. By February 2008, it expects revenue of R191 million and gross profit of R68.8 million.

Some 30% will be paid in cash with the balance being funded through the issue of new shares.

On its first day of trade, its shares closed at R1.20. By 10.20am, its shares were 2.76% up at R1.49. Tuesday's close was R1.45, while its 12-month high is R1.50 and its 12-month low is R1.