Aerial maker Poynting wants to boost turnover 10 times in the next three to five years by moving into new businesses, adding to what it owns, and through organic growth.
Poynting, which is targeting turnover of more than R1 billion, yesterday said revenue grew to R93.7 million in the year to June, from R80.97 million in the previous year. Net profit gained 36.04%, to R9.4 million, as earnings before interest, tax, depreciation and amortisation gained 24.96%, to R18.5 million.
Poynting's growth plan, which aims to take revenue to R1 billion over a three- to five-year period, was agreed to this year. It aims to achieve this through strategic acquisitions, autonomous acquisitions, and developing new business areas and technologies.
The company says strategic acquisitions will add between R50 million and R100 million in revenue, while turnover will be boosted to the tune of between R200 million and R400 million through autonomous acquisitions.
New business areas should add between R100 million and R300 million to the top line, and growth overall will contribute R150 million to R350 million.
CEO Andre Fourie says the company wants to make strategic acquisitions that will be bolt-on deals that will aid its current units. He says these will either be new products or new distribution channels.
"Growth will be in the form of acquisitions of new businesses, including strategic acquisitions to expand current business divisions in terms of product and distribution, and investing into completely new business areas." Fourie explains that the company is looking for acquisitions that can take it into new markets.
New markets
Poynting designs, manufactures and supplies antennas and telecommunication products to the cellular, wireless data and defence markets within SA and internationally, through its subsidiaries and partner companies. Poynting's export markets primarily incorporate Europe, the US, the Middle East and Asia.
The group operates four divisions: commercial, defence and the recently-formed CCS, in addition to its new business unit. Poynting established CCS as a vehicle to invest in the micro base station market.
CCS made a loss before interest, tax, depreciation and amortisation of R2.4 million. Its expenditure relates to investment in product development, and profitability is anticipated in the 2014 financial year, says Poynting.
When it comes to autonomous deals, these are aimed at helping it enter new markets, such as digital television, notes Fourie. He says these will operate separately and at arm's length.
It recently said it had made several "breakthrough inventions" in terms of set-top boxes, installation of digital television systems, and antennas and antenna manufacturing.
Poynting filed various patents and designs, and has developed some new software and systems to enable successful rollout of digital TV to consumers, it said in its results commentary for the first six months of the year. The intellectual property has the potential to deliver significant future returns, and it has started a new business unit to take advantage of the potential, it said.
Aucom, which it recently acquired, develops three-quarters of its products for consumers, says Fourie. He is excited by the new product range, as the technology behind the television aerial has not changed in 70 years.
The unit will not compete with Ellies, which distributes television and solar power products, Fourie points out. He says the companies are in talks around a way to co-operate.
Poynting is growing at around 20% a year and Fourie wants the new acquisitions to maintain this. He says this is how the company will meet its target.
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