Shrugging off its own annus horriblis in 2007 which included a failed takeover bid by Telkom, Business Connexion posted results today that have analysts gushing about its "dramatic turnaround".
The group reported a 16% growth in revenue from R3,55-billion to R4,11-billion and an operating profit up 51% to R164,2-million.
BCX says its revenue growth was driven mainly by strong growth in the Technology Infrastructure division of 30,5% to R1,6-billion, with the Business Applications division showing robust growth of 14,2% to R511,3-million. This was offset by modest growth of 6,9% to R2-billion by the Services division, it says.
"We are pleased with the progress in the second six months of the year," says BCX CEO, Benjamin Mophatlane. "The revitalisation programme announced in February 2008 has had a positive influence on the business and its performance. The operating margin and resultant headline earnings have been positively impacted by improved trading during the second half of the year and disciplined cost management. These trends in trading and cost containment have continued into the new financial year.
"The strong trading confirms that Business Connexion is a robust business with a strong and loyal client base," Mophatlane says. "We continue to focus on delivering a premium service to our clients."
In its SENS statement, the company says gross margins remained under pressure, mainly from the competitive nature of the business and the ongoing changes to the product mix, declining from 28,6% to 28,1%. However, the group`s operating margin increased from 3,1% in 2007 to 4,0% in 2008, aided by tight cost management which saw the growth in expenses limited to 9,7%.
The group is committed to achieving an operating margin of 8% by 2011.