Convergenet back in business

Johannesburg, 21 Apr 2008

JSE-listed Convergenet has reported a full six months of operations. This follows its 2007 annual results, which "effectively represented" a three-month period.

On Friday, the company - previously known as Vestor Investments - published its interim results for the period ended 29 February. Comparisons to the prior six-month period are not relevant, as the group did not trade during that time.

"Similarly, a comparison to the prior year`s results is not meaningful, as this represents results which effectively represent a thee-month period," noted Convergenet.

Revenue for the first half of the 2007/8 financial year came in at R425.6 million; 150% up on its full year revenue of R170 million. Net profit of R40 million was up 152% on the R16 million posted for the 2006/7 year. The company reported earnings per share (EPS) and headline EPS of 2.8c; this was up 18% and 14% respectively on its full-year earnings.

Construction under way

In February last year, the company underwent a management change. By July, the company had made four acquisitions, which make up its current business profile.

These included ConvergeNet SA, Structured Connectivity Solutions (SCS), Sizwe Africa IT Group and Telesto Communications. Convergenet says the latter three companies have "in particular" performed ahead of expectations in the period under review.

"The group experienced a strong demand for its products and offerings, and it has achieved growth in both market and customer share. We continue to experience strong demand for our offerings in spite of the current economic situation. Therefore the outlook for growth remains positive," it said.

In the period under review, subsidiary ConvergeNet made further acquisitions. It bought 74% of prepaid cellular operator Future Cell for R68 million, acquired 51% of X-DSL Networking Solutions for R5 million, and secured an additional 19% interest in SCS for R13.3 million.

Convergenet`s share price gained 3% to close at R1.18 on Friday.