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Pinnacle profitable as it changes to Alviva

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As it prepares for next week’s name change to Alviva Holdings, Pinnacle has reported solid revenue and profit increases for the interim period to December 2016.
Revenue for the interim period rose to R6,3-billion, up 46% from R4,3-billion in 2015.
Gross profit increased to R1,1-billion, from R557-million in 2015, and EBITDA was R409,6-million compared to 2015’s R243,1-million.
Net profit for the period attributable to owners of the company was higher at R178,7-million, compared to R150,4-million last year, while headline earnings per share were 106.1 cents per share, up from 2015’s 94.1 cents per share.
In line with previous years, no interim dividend is proposed for the period under review.
The company has a positive outlook for the year to 30 June 2017, with earnings expected to be above those of June 2016 due to ongoing improvements in all business segments.
Alviva plans to continue with improvements in working capital, to grow organically, to diversify the overall business, and to invest into new technologies.
In particular, it will target the services and solutions businesses for growth, both organically and by way of strategic acquisitions.
Group CEO Pierre Spies says that the group intends to become a billion rand business after tax.
While distribution is showing healthy growth of 11%, Spies says the group aims to grow through diversification, particularly in services and solutions
The market is evolving: security, he adds, with virtualisation, software and cloud all becoming more important.
Pinnacle already handles about 30% of the Microsoft cloud business in the South African market, Spies says, and aims to increase this going forward.
“We measure ourselves on how well we are diversifying into the enterprise market.”
The enterprise and infrastructure part of the distribution business now accounts for 30%, with client computing at 41%, compared to 26% enterprise in the first half of 2016 and 49% for client computing.
Spies believes Pinnacle has opened up a healthy gap between itself and its competitors.
As well as winning the Channelwise Distributor of the year awards this year, the Pinnacle group has been named the top distributor for many of the industry’s leading vendors.
The Datacentrix acquisition is paying dividends, Spies adds. The company recently signed up Coca-Cola Bottling Company and Barloworld Logistics for outsourcing contracts, adding to the groups annuity revenue.
Solareff is another acquisition that is doing well, with some high-profile installations already concluded and others on the cards.
Going forward, the group has changed its acquisition strategy, Spies says. Whereas the previous strategy was to target large, preferably offshore, companies, this has shifted to smaller, local companies.