Despite its EC-Hold acquisition troubles, MGX has reported solid results for the year, which reflect the short-term impact of the CCH acquisition and what the company describes as "difficult trading conditions".
Listed MGX`s balance sheet for the year to June reflects a full financial year for MGX and includes only four months of trade for CCH.
Revenue for the year nearly doubled, rising from R459 million to R884 million - a jump of 92.8%.
Operating income grew 77.4% from R73.0 million to R129.5 million and headline earnings rose 24.5% from R68.1 million to R84.8 million.
Earnings per share before interest, tax, depreciation and amortisation increased by 58.7% from 186.2c to 295.4c. Headline earnings per share grew 6.8%, from 147.3c to 157.3c.
MGX CE Chris Hills says although it has been a "challenging year with much distraction", management`s focus will now be turned to growing the business and looking after its customers.
Looking at the group`s performance, MGX management says although the CCH acquisition effectively raised its debt to equity ratio to 33% and accounted for a drop in interest received as well as a lower operating margin, it believes the integration of the companies will bear fruit in the short-term.
Hills says it will take between two to three years for MGX to eliminate the associated debt from the CCH acquisition.
MGX`s pre-existing divisions achieved or exceeded their budgets, with a "robust" performance coming from Storage Solutions, Drive Control Corporation and MGX`s UK corporations.
The exceptional items of R37.6 million came largely from a write-down in Maxtec of R16.5 million and a loss on the disposal of Optiplan of R17.4 million.
Hills explains that although the company has a 25% holding in Maxtec, it has absolutely no managerial control, without any MGX representation on the board. He says, however, that MGX will now have the breathing space to consider what to do with its shareholding in the listed storage company.
He adds that the EC-Hold acquisition and resulting Securities Regulation Panel court action has been contained, and the company hopes to move on with day-to-day business without further speculation from the investor community and media.
The MGX share dipped slightly this morning, trading 80c down at R12.20 shortly before noon.
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