Business Connexion lifts revenue by 43.5%

Information communications technology (ICT) group, Business Connexion (BCX) reported on Thursday (April 19,2012) a 43.5% rise in revenue for the six months ended February 2012, bolstered by the acquisitions of the UCS assets and Canoa Group during the previous financial year.

Revenue improved to R2.69 billion from R1.87 billion before, while operating profit increased from R40.2 million to R130.8 million.

Diluted headline earnings per share increased from 9.3 cents to 22.1 cents, and cash generated by operations increased from R116.6 million to R265.2 million.

The group’s services division delivered robust results, a large portion of which is annuity-based. Results for the reporting period saw revenue grow by 7.1% to R949.7 million, with process efficiencies driving an improvement in operating profits to R107.2 million.

Business Connexion said that the growth in revenue is a consequence of the division’s ability to grow its cloud service offering and professional services business, specifically in the application development business.

The UCS division contributed R503.4 million to turnover with an operating profit of R49 million, while the Canoa division contributed R344 million in revenue and R42 in operating profit.

Revenue in the technology division at R429 million was 28.7% down on the comparative period.

“Significant steps have been taken to restructure and right size the Technology division in line with current market trends in an effort to limit the negative impact on future group profitability while still retaining the division as a strategic component of the group’s offering,” Business Connexion said.

The innovation division increased revenue by 13.7% to R243.4 million following a restructure previously reported in Q Data DynamiQue and the inclusion of Accsys, the payroll business that formed part of the UCS assets, in the Innovation division.

The International division saw revenue growth of 26.6% to R213.9 million for the period as it continues to extend its reach onto the continent.

Looking ahead, the group said that the changes to the management structure announced on August 31, 2011 have started unlocking the collective strengths of the enlarged group and are anticipated to continue to enhance the performance going forward.

“The group anticipates continuing to grow its annuity revenue base. The on-going investment in its intellectual property is proving a differentiator. Business Connexion’s enhanced product and services offering, together with its strong cash generation and healthy balance sheet, positions the group extremely well to continue its current growth trajectory across the continent,” it said.

Business Connexion said that, based on the strong growth for the first half and the expected earnings in the second half of the current financial year, the group is reasonably certain that its full year results for the year ending August 31, 2012 will reflect an increase in diluted headline EPS and diluted EPS of greater than 20%, when compared to the previous corresponding period.

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Business Connexion lifts revenue by 43.5%