Expansion further into Africa and internationally is a key strategic objective for the next 12 to 18 months, says JSE-listed Morvest.
The group, which yesterday reported its results for the year to May, says there are “significant growth opportunities” in emerging markets - mostly in outsourcing, ICT, resourcing, training and education. These prospects could offer an attractive counter to anticipated tough conditions locally, it says.
“Successful implementation of the group's diversification strategy is a priority for the next financial year.”
Morvest reported revenue up 7.6%, to R868 million, for the year, while headline earnings gained 10%, to R36 million, which translated into earnings per share of 2.33c and headline earnings per share of 6.81c.
Tough going
Morvest says the South African and Nigerian markets were challenging during the year, although its local operations performed well, with satisfactory improvements in margins after its restructuring programme.
Varachia cautions that the next 12 to 18 months will show a still sluggish domestic economy and trading challenges that include ongoing pricing pressure from a cost-sensitive customer base.
“Further cutting of overheads, while retaining quality, will remain a priority, looking to new geographical markets is a focus, and integrating our new acquisitions and bedding down the retail and consumer services division is key to generating new revenue streams and maintaining our growth curve.”
Black-empowered Morvest is a holding group with a footprint in SA, Mozambique, Nigeria, India and the US. Its operations are aligned into three key divisions: business support services (including professional services and outsourcing solutions), ICT solutions, and the recently added retail and consumer services, which it added in line with its diversification strategy.
The new centralised group campus, in Midrand, due to be completed by February 2013, is expected to reduce rental and administrative costs, and introduce economies of scale, Morvest says.
During the year, Morvest started its investment in a multi-purpose, centralised campus. The company acquired land for R17 million in Midrand, with the intention of building a new office complex.
Construction has begun and costs incurred to year-end total R4.5 million.
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