Business Connexion jumps on earnings forecast
Shares in Business Connexion (BCX) made healthy gains in afternoon trade on the JSE, after the group announced an improvement in H1 earnings and forecast.
The group’s share price advanced more than 4% on the JSE in noon trade, before retreating to R4.70, or a gain of 2.17%, in the afternoon session.
On Thursday (April 19, 2012) the information communications technology (ICT) group, reported a 43.5% rise in revenue for the six months ended February 2012.
Revenue improved to R2.69 billion from R1.87 billion before, while operating profit increased from R40.2 million to R130.8 million.
Business Connexion CEO, Benjamin Mophatlane announced a number of acquisitions and partnerships including a deal with managed hosting group RackSpace, for a push into cloud services and the purchase of Quad Automation.
According to Mophatlane, the former deal would see BusinessConnexion as an authorised cloud builder for dedicated private cloud services hosted in client data centres and BCX data centres. The deal would enable BCX to provide RackSpace Cloud: Private Edition globally. BCX, he said, would supply and deploy the solution with RackSpace managing it.
Business Connexion said that, while 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”.
Mophatlane said that industry veteran, Doug Woolley had been appointed to lead the division. “The technology division is expected to recover in the short-to-medium term,” he 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 31 August 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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