Alviva Holdings has reported revenue of R13,6-billion for the year ended June 2018, with attributable profit up 4% at R422-million.
“We are 6% up on revenue in a very tough economy,” says group CEO Pierre Spies.
The group has declared core EPS of 302,2 cents, up 18% from last year, and a dividend increase of 8%.
The gross profit percentage has remained steady at 17,7%; while the group generated cash of R1-billion.
Spies points out that the group’s strategy of diversification has paid off, with overall results showing an improvement despite losses in the infrastructure sector.
“Our strategy is to diversify,” he says. Although distribution had a very good year, Alviva already holds 35% market share in this area, making it difficult to achieve additional growth.
Spies believes new growth will come from the services and solutions business.
The positive results are predominantly attributable to the performance of the ICT distribution segment and Alviva’s recent investments, mainly the acquisition of the balance of Datacentrix
Holdings in February 2017 along with the investment into Alviva’s share repurchase programme.
Most of the group’s divisions performed well, showing encouraging growth throughout the year with the exception of our three infrastructure businesses, namely: Datanet, Infrasol and Solareff.
Further acquisitions have been finalised during the year, and will start to contribute more meaningfully in the ensuing reporting periods.
The ICT distribution segment increased revenue by 9% and EBITDA by 8%. Working capital was well managed throughout the year, resulting in reduced finance costs.
Margins were improved due to the improved deal management, optimised product mix and more consistent inventory management.
The services and solutions segment increased revenue by 4% but EBITDA decreased by 13%.
The segment experienced delayed projects and were unable to repeat some of the large projects executed in the prior year, even though the activity levels and quote registers have increased over the year.
The effect of the infrastructure businesses of Infrasol and Solareff had a marked impact on its performance.
Centrafin (the financial services segment) increased revenue by 2% and EBITDA was marginally lower by 1%. The segment continued to manage its book very well in tougher market conditions.
The recent brand refresh, combined with a move to new premises, had a short-term diminution in the returns of the entity, but Alviva remains confident that the business is being positioned for growth in the longer term.
On 31 August 2017 Alviva, through its 51%-held subsidiary Solareff, subscribed for shares in Gridcars to the value of R3-million, representing 75% of the total issued equity.
Gridcars is a Pretoria-based developer of electric vehicle charge-point software management systems and supplier of charge points.
Alviva believes that growing a network of charge points in South Africa will be the enabler of a carbon-free transport system. This acquisition forms part of the group’s renewable energy business strategy.
Effective 31 October 2017 Alviva, through its subsidiary company DCT Holdings, entered into an agreement to acquire 51% of the shareholding in Sintrex for R102-million, and has an option to acquire a further 24% within a two-year period following the effective date of the transaction.
Sintrex is an infrastructure management company, based in South Africa, providing end-to-end IT solutions and services. Sintrex develops IT products, services and solutions that, along with global partnerships, provide clients with the visibility and performance insight into IT infrastructure management, network management and monitoring solutions.
The Sintrex acquisition will not only add a specialised products and services offering, but also a higher margin business to the group.
Effective 30 November 2017 Alviva, through its subsidiary company DCT, acquired 100% of the equity of VH Fibre for a total purchase consideration of R110-million.
VH Fibre specialises in supplying fibre-to-the-home and fibre-to-the-building passive network solutions to its customers and has the exclusive Prysmian Group distribution agreement for South Africa.
This acquisition will give the Group access to the fibre infrastructure business that it had not really addressed properly and will enhance the margin in these product sets.
With effect from 1 February 2018 Alviva, through its subsidiary company DCT, acquired 72% of the equity of Obscure for a purchase consideration of R72-million based on future earnings.
Obscure specialises in brokering best-of-breed security solutions to market, creating a channel for vendor and customers through its offering of information security products and concepts.
The Obscure acquisition will enhance the cybersecurity product offering in Alviva’s distribution cluster.
With effect from 1 March 2018 Alviva, through its subsidiary company Datacentrix Holdings, acquired 70% of the equity of DG for a purchase consideration of R118-million.
DG is a leading provider of custom-made ICT business solutions, designed to unlock and maximise the full lifecycle value of ICT products, services and infrastructure for businesses in both the public and private sectors.
Its world-class products and solutions range from the sourcing and supply of end user equipment like mobile devices, laptops and desktop PCs to the provision and setup of high-end servers and networks, as well as comprehensive infrastructure design and implementation and full data centre solutions delivered on-premises, in the cloud or via hybrid systems.
The DG acquisition will enhance the services offering to Alviva and adds to the Group’s exposure to enterprise customers.