Business Connexion (BCX) is set to continue with its African expansion strategy by buying entities on the continent as the industry makes a fundamental shift towards the Internet of things.
During the year to August, the listed company - which is in the midst of being bought out by Telkom for R2.67 billion - made several purchases: managed print services company Panabiz in Nigeria, point-of-sale entity Ultimate Software in Botswana, and Appzone, a technology services provider based in Nigeria.
Locally, BCX also acquired a 30% stake in African Arete, which is a services solutions business focused on the small and medium enterprise (SME) market. It also bought the SME division of Argility and the balance of Netcampus.
BCX notes industry dynamics are set to change significantly in coming years, driven by continuing market consolidation and a fundamental shift to the cloud and the Internet of things, which it says will "present new and exciting opportunities" for the group.
It says its merger and acquisition strategy will continue to focus on opportunities in the rest of Africa and to acquire "innovative solutions" to enable it to play a "leading integration role" in the Internet of things.
In the year to August, organic revenue increased 7.2% due to new enterprise client wins, reflecting its focus on an improved sales culture and cross-selling. Reported revenue grew 5.5% to R6.5 billion.
Its normalised gross profit margins remained largely unchanged at 29%, despite tough economic conditions and continuing market pricing pressure, it says. However, its normalised operating profit margin dropped from 5.2% to 4.9%.
Operating expenses, a continued focus, came in at 5.2%, which is below inflation.
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