Publications
Partners
Johannesburg - ICT group Business Connexion Group [JSE:BCX]) on Thursday reported diluted headline earnings per share of 9.3 cents for the six months ended February 2011 from 27.3 cents a year ago.
The company said trading conditions during the period remained tough with limited success in tender opportunities particularly in the public sector.
Revenue declined to R1.87bn from R2.01bn a year ago, while operating profit fell to R40.2m from R122.0m before. Profit for the period amounted to R29.2m, down from R90.2m.
The group recorded an operating profit margin of 2.1% from 6.1%. This decrease was exacerbated by the decrease in revenue and resultant loss in the technology division. Management expects a recovery in margins from existing operations and a further enhancement from strategic growth initiatives.
"While these results are below the group's expectations, the underlying businesses remain profitable and cash generative," it said.
It noted annuity revenue from key clients is stable and the services division has an industry leading position in outsourcing IT services with a stable 25% market share.
The innovation and international divisions had a good first half and look forward to public sector opportunities materialising in the second half. Margins in the technology division remain under pressure, it said.
Cloud computing remains an exciting driver to the services division, the group noted. With revenue at R887.1m the services division is the largest contributor to group revenue, however, this is down from the prior period of R947.8m.
Shareholders approved the acquisition of certain target companies from UCS Group at the end of March and this should result in benefits to the group, the company says.
Looking ahead, the diversity of the Business Connexion's customer base, product and services offerings, the skills base and commitment of its employees as well as the strength of the group's balance sheet, provide a solid platform from which the group can seek out further opportunities for acquisitions and grow its service offering and market share, it said.
The company said trading conditions during the period remained tough with limited success in tender opportunities particularly in the public sector.
Revenue declined to R1.87bn from R2.01bn a year ago, while operating profit fell to R40.2m from R122.0m before. Profit for the period amounted to R29.2m, down from R90.2m.
The group recorded an operating profit margin of 2.1% from 6.1%. This decrease was exacerbated by the decrease in revenue and resultant loss in the technology division. Management expects a recovery in margins from existing operations and a further enhancement from strategic growth initiatives.
"While these results are below the group's expectations, the underlying businesses remain profitable and cash generative," it said.
It noted annuity revenue from key clients is stable and the services division has an industry leading position in outsourcing IT services with a stable 25% market share.
The innovation and international divisions had a good first half and look forward to public sector opportunities materialising in the second half. Margins in the technology division remain under pressure, it said.
Cloud computing remains an exciting driver to the services division, the group noted. With revenue at R887.1m the services division is the largest contributor to group revenue, however, this is down from the prior period of R947.8m.
Shareholders approved the acquisition of certain target companies from UCS Group at the end of March and this should result in benefits to the group, the company says.
Looking ahead, the diversity of the Business Connexion's customer base, product and services offerings, the skills base and commitment of its employees as well as the strength of the group's balance sheet, provide a solid platform from which the group can seek out further opportunities for acquisitions and grow its service offering and market share, it said.
