JSE-listed diversified holdings company Sekunjalo Investments says now is not the right time to look at spinning off its ICT unit onto the bourse and it wants to grow the business first.
The company this week released its interim results for the six months to February and said revenue grew to R178 million, from R134.4 million. Net profit gained slightly, moving from R6.7 million to R6.9 million.
Sekunjalo says its gross profit percentage improved from 28% to 38%, because of improved margins and efficiencies, particularly from the IT and fishing operations.
Sekunjalo Technology Solutions Group, a wholly-owned subsidiary, grew revenue 87%, to R73 million, and is in a “strong financial position,” says Sekunjalo. Operating profit of R26 million, compared with R5 million in the previous corresponding period, was above expectations.
Scouting around
CEO Khalid Abdulla says the strategy the company implemented two years ago is starting to pay off. He says much of the growth has been organic as the company has not invested in acquisitions.
Sekunjalo aims to add to its current ICT offerings, which includes Health System Technologies, Saratoga Software, Digital Matter and a 30% stake in British Telecom Communication Services South Africa, says Abdulla.
Abdulla explains the company wants to complement its existing services and may expand into niche and innovative areas. While there are no deals on the table currently, the “deal flow” started to improve in the past month, he adds.
Sekunjalo, which previously aimed to spin off its ICT unit as a separate listing, is holding off on that plan for now, says Abdulla. He explains that market conditions are not right at the moment and the firm may re-examine the option in a few years when the unit is a “significant” business.
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