Internet Solutions (IS) has released financial results to end September, which indicate excellent growth and an enviable nine-year track record within the IT sector. Despite a tumultuous trading period for most businesses in the industry, the company has bucked the trend, reflecting growth in turnover of 30% and a remarkable 59% increase in profit before tax.
Gross margins have been retained despite pricing pressures and a depreciation in the currency. This has been achieved via a variety of interventions including the bundling of higher margin products with those which have suffered from the above factors; close attention to economies of scale within operations; supplier re-negotiation and a change from satellite to fibre technology.
There has been a huge improvement in the expense to revenue ratio over the previous fiscal.
"We have focused our management on this front," says Chief Operating Officer, Jason Goodall. "Our investment in a dedicated call centre process has paid off with increased customer satisfaction and hence retention."
The introduction of automated processes has enabled the sales and client service teams to manage expanded revenue streams without an increase in staff numbers.
Internet Solutions with its base of retainer clients is highly cash generative. The successful management of working capital is a key contributor to its bottom line growth and thanks to favourable interest rates, the company has enjoyed a healthy increase in interest earned.
Managing Director, Angus MacRobert, ascribes the company`s ongoing success to a combination of being able to offer an array of innovative products while maintaining a reputation among clients as a reliable provider of crucial access and hosting services, the backbone of its business.
"We have been in business for nearly 10 years and the results this year are no flash in the pan. Our profits have shown cumulative average growth rates of 48% for the period 2000 to budgeted 2003, a fact any business would be proud of," he says.
From a market share perspective, Internet Solutions, with one of the largest extended data networks in the country, remains the first choice for both large and medium-sized corporations. This leading position was established in 1993 and has been retained, despite vigorous competition over the period.
"Having such a committed client base has presented us with a number of opportunities for growth. Many of these high value-add offerings, such as security, are already being actively marketed and have found a high level of acceptance," continues MacRobert.
A second key success factor is the company`s highly committed staff. Employee turnover is stable and indicates a motivated workforce. An all-encompassing training and development programme has been one of the cornerstones of its employee philosophy as well as a corporate culture which is serious and yet encourages innovation and creativity. Research conducted by the respected BMI-TechKnowledge Group during 2002, indicates that the total Internet services market is expected to grow from R3 billion in 2001 to R7.6 billion in 2006. This offers the company much opportunity to expand their core base while at the same time growing through the introduction of innovative services and solutions.
"Our emphasis has always been on clients, their needs and how best to serve them," says MacRobert. The internal structure is geared to managing a massive client base efficiently and effectively. The focus is on retaining clients by ensuring that they receive the best possible attention and fast turn around when problems arise. Recent independent research indicated that the client churn factor is dominated by mergers within the corporate sector rather than dissatisfaction with service delivery.
MacRobert is confident of future growth. "We operate in an exciting and growing industry and with our high staff motivation levels and large and satisfied client base, expect continued gains in market share and profits," he concludes.
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