Alviva bets on new businesses in challenging economy

Alviva, a provider of ICT products and services, on Monday published its financial results for the year ended June 2019, showing revenue climbed 17% to R15.9 billion.

The group said it endured a difficult trading period over the last financial year. “The vast majority of its operations are exposed to the South African economy and so, given that there has been little or no growth in South Africa during this period, it would be of no surprise to advise shareholders that this has been a challenging operating environment.

“Notwithstanding, the investments made into new businesses have helped increase revenue and Alviva’s existing businesses have produced a resilient performance to allow the Group to maintain its returns to shareholders, Alviva said.

Companies within the group include Axiz, Datacentrix, and GridCars, a provider of charging station infrastructure for electric vehicles.

Financial highlights:

  • Revenue at R15.9 billion UP 17%
  • EBITDA at R860 million UP 5%
  • Headline earnings per share at 297 cents UP 9%
  • Core earnings per share at 353 cents UP 17%
  • Gross dividend per share of 30 cents UP 11%

Alviva warned that the outlook for the year ending June 2020 is unclear. “The economy is under huge pressure with little or no apparent appetite for investment. Much needs to be done to turn around confidence in the business arena,” it said.

“Notwithstanding these factors, the group has well established businesses with solid experienced management in place that have shown themselves to be adept at growing revenues during times of hardship.”

In addition, Alviva said that the new acquisitions that have been brought into the group recently offer “exciting prospects”. “We remain cautiously optimistic albeit that we are surrounded by despondency,” it said.

Alviva announced in June that it would acquire 70% of Synerg SA, through its subsidiary DCT Holdings.

And through its subsidiary Alviva International Investments, it also entered into sale of shares agreements to acquire 51% of Synerg UAE and Synerg UK – the Synerg Group.

“Alviva has increased its business exposure in the IT services and solutions space, a focus area of our acquisition strategy. The Synerg Group will be an additional investment in this lucrative sector of the IT industry,” Alviva said by way of rationale for the purchase.


Read: Alviva to acquire Synerg Group

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Alviva bets on new businesses in challenging economy