Listed investment company Morvest is looking outside of SA for growth as the local outlook is still murky.
The company, which until recently was called Simeka Business Group, yesterday reported results for the year to May. It said revenue grew 16%, to R807.3 million, 90% of which was generated in SA.
Its business support services contribute the bulk of its revenue, and ICT solutions the balance. Earnings were up 35.5%, to R104.7 million, and margins increased to 13%, despite pricing pressures from its customer base.
However, CEO Mohammed Varachia is cautious on growth prospects locally in the next year to year-and-a-half. “Growth prospects locally are coloured by a challenging outlook for the next year to two,” he says.
“As a result, a key focus for the group is expansion in Africa and international markets. Emerging markets particularly offer promising opportunities in specific sectors in which we have established capability,” says Varachia.
Morvest already has a presence in Nigeria, where it has for the past six years provided SIM and scratch cards to major cellphone operators in the country. It also has operations in Mozambique, India and the US.
“Nigeria was a key growth focus for the group and notable milestones were achieved during the year,” Varachia says. Morvest launched a full suite of offerings to the market in June.
After the end of the year, Morvest bought a 50.1% stake in R and S Consulting for R50.1 million. The company provides mobile data applications and strategy.
Despite the acquisition, of which R15 million was paid for in cash, the company has a cash balance of R84.5 million. Morvest declared a maiden 1c a share dividend.
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