Sekunjalo boosts earnings

Johannesburg - Sekunjalo Investments [JSE:SKJ], which has interests in financial services, ICT, fishing and media, among others, on Thursday reported diluted headline earnings per share of 6.99 cents for the year ended August 2011 from 2.64c a year ago. No dividends have been declared for the current period.

The board continues to work towards payment of dividends in the foreseeable future and believes that the group strategy will deliver returns on the investments, it said.

Net profit before tax from continuing operations increased by 73% to R36.5m and investment revenue surged by 256% to R20.97m. Cash generated from operations rose by 98% to R31.8m.

Group revenue grew by 9% to R440.4m, despite the adverse effects of the strong rand and tough market conditions. Profit from continuing operations jumped by 222% to R26m.

During the period Sekunjalo focused on improving operational efficiencies and eliminating non-essential costs. This resulted in the group increasing its overall gross profit percentage from 28% to 30% in 2011 for continuing operations.

The information and communications technology division's revenues from continuing operations increased by 61%.

Fios, a subsidiary of Technology Solutions Group, was sold during the year and the group also finalised the disposal of First Light Administration Services in its financial services division. This resulted in the containment of losses from this division.

The group's strategic investments consist of British Telecom Communication Services South Africa (BTSA) and Saab South Africa, which were acquired last year. The unlisted private company investment value has grown by 27% to R194.6m.

The group received a maiden dividend of R13m from BTSA during the year under review.

"Sekunjalo's partnership with BTSA has been very successful to date. The companies have grown to understand each other's business methodologies and have effortlessly integrated their philosophies. BT has performed extremely well during the year despite the current economic climate. It has exceeded budgeted expectations and looks extremely well positioned to grow aggressively over the next few years," it said.

"Saab SA, the South African operations of Swedish multinational Saab AB, has settled well into the group. With its specialised capabilities in civil security and defence, the group expects this investment will produce the expected growth in the medium term," it said.

Looking ahead, the group said that with the growth of its core operational investments in its technology and fishing sectors during the current year, it has built a strong platform for the next few years.

"Due to the financial success during the year under review, we believe that Sekunjalo is well positioned for further success through acquisitions and strategic initiatives," it said.