Huge seeks sustainable growth

By Nicola Mawson, Contributing journalist

Johannesburg, 02 Jun 2009

Telecommunications company the Huge Group will focus on sustainable business as it seeks to limit the effects of bad debt and grow the company.

CEO James Herbst says the firm, which has seen bad debt impact earnings in its latest results, is working with clients struggling to meet debt obligations. Bad debts reduced trading profit from operations, impacting earnings and headline earnings per share by 2c a share in the year to February.

He notes the group aims to benefit from the tight trading environment as companies look at ways to trim costs. “Last month, we signed over R15 million worth of new business and we are cautiously optimistic that this trend will continue. SA is officially in a recession so many who were sitting on the sidelines waiting to see what will happen are now beginning to take action and cut costs where they can.”

Herbst says the company has a “dedicated team within our finance department who handle our debtor's book and we are looking at ways to help companies who are struggling to meet their obligations to us”. The group has also reviewed its credit vetting processes and is looking more closely at each deal to ensure it is mutually beneficial.

Huge is already reaping the benefits of its debtors' management, but the positive effects would be “more pronounced” in the second half of the year, he adds.

“We are not just taking on business for the sake of growth; it needs to be sustainable and profitable and, above all, secure.”

While the company is looking for growth outside of SA, it is focused on SA at the moment, notes Herbst. “We believe there is significant opportunity in SA, especially with the liberalisation of the sector, and the beginnings of real competition among the big players, which for us just opens up more scope for providing proper management of all the players now present.”