SilverBridge in acquisition talks

Listed software company SilverBridge seeks to grow by buying out another company, it says.

However, as the financial services solutions company is trading under cautionary, it did not disclose any additional information in its interim results announcement for the six months to August.

SilverBridge says its strategy is starting to pay off, as it grew revenue 71%, to R51 million, and bolstered net profit by 143%, to R6.2 million, during the half-year. CEO Jaco Swanepoel says “given the state of the economy locally and globally, we are very pleased with these results”.

“Our strategy is starting to pay dividends,” says Swanepoel. He says Ones & Zeros, which was acquired by SilverBridge, is starting to add to the company's bottom line.

“Both of our operational entities performed strongly. Ones & Zeros delivered 29% of revenues and 14% of profits, and its consulting activities provide the group with a stable income stream,” he explains.

SilverBridge acquired 51% of Ones & Zeros, which offers consulting services to financial institutions, on 1 July last year, for R12.3 million.

In addition, Swanepoel says: “SDT, which focuses on the insurance sector, had a good year, securing a number of tier one clients. This led to healthy implementation revenue, which increased 63%, to R17.86 million, at a segment margin of 49%.”

The company ended the year with R14.2 million in the bank, and is actively seeking to take over another company. Its strategy is to expand into other pillars of financial services through organic and acquisitive growth.

In the short- to medium-term, it is focused on offerings in the short-term insurance administration sector and providing loan administration software.

SilverBridge says it is in talks around a potential transaction, and has advised shareholders to be cautious when dealing in its shares. It did not provide any further information.

However, Swanepoel says market sentiment in the last 12 months has not been conducive to closing any deals. He explains that the companies SilverBridge is seeking to buy expect an unrealistic price, which it cannot pay, while the country is in a recession.

The company's shares were unchanged at R1.60 in early morning trade.

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