Business Connexion (BCX) is on the lookout for niche acquisitions to add to its Nigerian operation, which is the biggest contributor to profitability in its international unit.
The group's international business, which spans Kenya, Mozambique, Namibia, Nigeria, Tanzania, Zambia and the UK, grew revenue 13.9% in the year to August, a rate that was faster than the company's top line.
Overall, revenue came in at R6.2 billion, with R6.07 billion of this from continuing operations, and the balance from operations that have been discontinued. Its operating profit increased from R275 million to R322.6 million.
The group declared a R233 million profit, up from R196.1 million, which translates into basic earnings per share of 44.7c, a gain on last year's 37.5c. BCX maintained its dividend at 20c a share.
CEO Benjamin Mophatlane says: "2013 was a year of acceleration for the group and we have made excellent progress in consolidating our position to deliver the best possible service and solutions to clients both locally and in Africa."
Deeper presence
BCX notes its focus on organic growth, African expansion, strategic acquisitions in the context of long-term sustainability, and cost containment benefited it during the year, while building a platform for future growth.
Its African ambitions have been focused on Kenya and Nigeria, as these locations give it a base in East and West Africa. In February, it launched data centre services in Nigeria, and said this was a "major milestone" in its continental expansion.
The group notes in its results commentary it aims to entrench and grow its footprint in Africa. Organic growth in Nigeria will be supported by potential niche acquisitions as BCX continues its focus on the key growth market. "The group remains confident in unlocking the significant future potential in Africa."
Its international division, its smallest unit, returned turnover of R532.3 million, while operating profit was R11.1 million.
Divisional view
BCX's services unit, its largest revenue-spinner, grew its top line 7.7%, to R2.15 billion, thanks to its application development business, especially in the public sector. However, says BCX, "profitability was negatively impacted by the delays in transitioning a number of new contracts in the first half of the year".
UCS, which BCX bought for R614 million in 2010, is its second-largest entity, turning over R1.17 billion during the year. However, operating profit dropped from R100.4 million to R116.9 million, after client project delays and the integration of a new cabling business at lower-than-expected margins.
UCS is expanding its retail offerings into Africa, a move that is starting to gain traction and will be evidenced in the new financial year, says BCX.
Canoa, which offers managed print solutions, grew revenue 29.9%, to R1.1 billion, while operating profit gained 9%, to R116.1 million. The boost was thanks to its exclusive distribution partnership with Canon to provide copy, print and imaging solutions in Southern Africa, it adds.
Technology recorded revenue of R694.7 million, and operating profit of R26.5 million, a leap from last year's R3.3 million. BCX's innovation unit reported flat revenue at R508.7 million, but grew operating profit from R67.6 million to R93.6 million.
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