Listed diverse outsourced business support services company, Mvelaserve, has bought 80% of cell mast maintenance provider, LTP Mast and Infrastructure, for R14 million, in a bid to grow its business activities and expand its margin.
Mvelaserve yesterday reported its results for the six months to December and said revenue gained 14%, to R2.5 billion. However, profitability was hit by ongoing restructuring in the catering and cleaning operations, and the costs involved in bedding down newly-acquired companies.
Profit from continuing operations slumped from R46.9 million a year ago, to R21.9 million in the first half of its new financial year.
Adding margins
CEO Jorge Ferreira says the company bought LTP to further diversify the group, which offers security through Protea Coin, facilities management through TFMC, Royalserve catering and cleaning, Contract Forwarding freight services, water purification through SA Water, and IT support and services unit Circle ICT.
LTP contributed R13 million in revenue and an operating profit of R2 million to the first half of the year's results.
“Although start-up operations find it challenging to deliver against bullish expectations in a negative economic climate, we remain positive that these investments will ultimately contribute positively to the group's financial indicators,” says Ferreira.
Targeting break even
Relative newcomer Circle ICT is still finding its feet, although it has a healthy order book, says Mvelaserve. Circle ICT is enabling significant cost saving at the group's other operations with its internal IT programmes and added R13 million to revenue.
Circle is expected to break even in the second half of the year and become bottom line positive in the next financial year, says Ferreira.
The unit was founded in 2010 to provide in-house ICT solutions, and was spun out of Protea Coin to operate as a separate entity last July.
Share