JSE-listed Business Connexion is looking forward to business as usual and bedding down its recent investments in the next financial year, despite the Telkom bid hanging in the air, says CEO Peter Watt.
In the last financial year, which it reported on Wednesday, the company completed two major internal exercises that Watt says gives the company "a lot more to do business with".
Some R196 million was spent on capital expenditure in the last year, some of which went into continuing investment in its new R143 million data centre, and the implementation of SAP, as well as internal restructuring.
These interventions took their toll on operating expenses, which rose 16% to R767.3 million compared with R663.4 million the previous year. As a result, operating profit fell to R143.8 million, compared with R185.1 million in 2005.
Watt is hopeful these two "major" internal exercises completed during the year will position it for growth. However, both exercises were underestimated in terms of the toll they would take on time and cost, he says.
Huge strain
Implementing SAP placed a "huge strain" on the business and took more time and effort than the company had originally envisaged. Watt adds it diverted attention from the company`s core function. "It`s not something you want to happen too often in your life."
The data centre, however, was over-planned. This was because the company needed to ensure it did not "drop any catches". Over half its customers have been moved in successfully, says Watt.
Next on the company`s drawing board is a move to bed down these internal exercises and consolidate its position in the marketplace. There are no further major infrastructure endeavours planned, he says. "Both of those exercises are now behind us."
While the company is quite cash flush, with R743.3 million on hand, Watt says - in terms of the situation where it may be taken over by Telkom - this is a situation in which he would rather remain.
"We have to continue business as if it`s business as usual." If the competition authorities do not allow the deal to go ahead, the company needs to be in a position that allows it to continue running as successfully as possible, he says.
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