Global technology company MB Technologies is looking toward a R2 billion turnover for the year to August, says CEO Leo Baxter.
MB Technologies turned in R915.9 million revenue for the interim period, but Baxter says the company traditionally has a stronger second half and is confident of reaching R2 billion by its August close of books.
"We are well positioned to reach the R2 billion mark, and are looking at twice our current operating profits."
Audited results for the year to August 2000 showed a turnover of R1.5 billion and operating profits of R66.8 million. Interim results released yesterday saw operating profits before amortisation and depreciation increase by 57% to R53.5 million.
The group managed to see its value-added distribution division ride out the stormy industry trends of reduced demand.
"This division, which includes Tarsus Technologies, improved its position rather than just holding on. This can largely be attributed to the very tight control and management measures which we have implemented," says Baxter.
Similarly, MB Worksoft has been streamlined and Baxter says the number of composite divisions within the company have been rationalised to make it less unwieldy.
"[MB Worksoft] has taken a while to reach profitability, but has taken on some good clients and is now operating under two main divisions comprising infrastructure, including networking and data, and solutions.
"MB Worksoft will make a R100 million contribution in sales for this year, so it is a relatively small part if you look at it in context of the R2 billion total, but it remains an important company to us and is looked at favourably by the market," says Baxter.
The group will focus on its local storage solutions for its global expansion, which Baxter describes as having a high margin and low risk business model.
He says MB Technologies` 41% interest in US company LiveTechnology will pay off in the near future.
"I don`t like giving an exact timeline, but our $15 million investment in what is now a $400 million company will be paying off soon. We are expecting this Internet company to reach profitability in the near future."
Commenting on MB Technologies` share price, Baxter says the 10c drop in the share after the release of the company`s interims can be attributed to a generally depressed market as well as a measure of profit taking.
The share gained 5c later in the day to close at 150c. Baxter says the share is still grossly undervalued.
Related stories:
MB Technologies continues growth
Share
