Morvest is a leading black-empowered provider of business support services (including professional services and outsourcing solutions), ICT solutions and retail and consumer services. The latter was recently added in line with the group's diversification strategy, and allows the group access to the business-to-consumer market. The retail and consumer services division is expected to start contributing to revenue in the second half of the financial year.
Continued pricing pressure from the group's existing client base, as well as competition from the aggressive emerging markets, resulted in a decreased EDITDA margin to 14.1% (2011: 16.5%). Headline earnings went up to R25.6 million (2011: R25.5 million), translating into a 6.8% jump in headline earnings per share of 5.20 cents (2011: 4.87 cents).
Looking ahead, CEO Mohammed Varachia says the group foresees a challenging 12 to 18 months period ahead, due to difficult market conditions and continued pricing pressure from a cost-sensitive customer base. Further enhancement of BEE equity ownership and expansion into Africa and other international emerging markets remain key strategic objectives as part of the group's diversification strategy.
Morvest's share closed Wednesday at 18c.
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