Business Connexion (BCX) released its interim financial results for the six months ended 28 February 2014 yesterday.
Revenue increased by 5,5% to R37-billion, EBITDA increased by 61,8% to R421,8-million, operating profit increased by 107% to R300,3-million, cash generated from operations increased by 4,7% to R261,7-million and normalised diluted headline earnings per share were at 20,7 cents.
The services sector was the biggest contributor to revenue at 35,8% of total revenue for the six months. Services revenue grew by 11,5% to R1,1-billion. Revenue growth was driven by the new business won in the latter part of 2013.
“This trend is expected to continue as spending in the South African enterprise application software services market is predicted to increase by 10,5% to R5,7-billion in 2014, and experience a compound annual growth rate of 13,3% across the next three years,” states Frost & Sullivan Information & Communication Technologies Research Associate Ankit Trivedi.
“The banking, government and the telecommunications sectors will be the biggest spenders on enterprise applications software during this period.”
Business Connexion is well positioned for growth in Nigeria due to the acquisition of Panabiz Nigeria, a managed print services company. The potential market for managed print services in Nigeria is enormous due to the presence of the growing financial services and telecom sectors.
“Nigerian enterprise customers find it more cost effective to pay for print services, as opposed to infrastructure, as it allows them to pay per use and also saves them from the hassle of maintaining the printing equipment,” notes Trivedi.
“Also, its data centre offering is a stellar competitive advantage due to the ever increasing demand of cloud computing services on the African continent. Underlining the importance of its key African growth markets, BCX recently opened new data centres in Nigeria and Kenya, with more expected to follow in the future.”
The organisation has positioned itself as a prominent provider of information communications technology (ICT) solutions in Africa through its ability to offer a range of ICT services including systems integration, outsourcing, and software and hardware support installation across various industry verticals and multiple geographies.
Trivedi concludes that going forward, Business Connexion’s strategy should be to focus on niche acquisitions, African expansion and organic growth to maintain sustainable competitive advantage.