Biggest growth in SA tech companies

The tech industry in South Africa is booming, with a majority of listed ICT and technology companies showing growth in their financial years ending in 2012.

Growth in business can be measured in a number of ways – an increasing work-force; a larger product range; or even larger profits.

However, when it comes down to it, it’s the bottom line that counts – who is bringing in the most money?

Despite a tough economic climate, and global issues causing a slower tech market, most South African companies in the field are reporting healthy revenue; though the country is not without its poor performers, either.

BusinessTech takes a look at the tech space in South Africa, to find out who has shown the biggest growth in turnover in each respective financial year end in 2012, when compared to revenue accrued previously.

South African tech company growth by revenue for year end in 2012

Company 2012 Revenue (R000’s)
2011 Revenue (R000’s)
2010 Revenue (R000’s)
2011-2012 growth (%)
EOH 3,642,915 2,428,973 1,692,421 +49.98
Ellies 1,711,252 1,316,055 1,156,477 +30.03
Jasco 983,693 763,498 559,268 +28.84
AdaptIT 219,614 173,533 149,239 +26.55
Mustek 3,502,543 2,896,924 3,409,515 +20.91
Naspers 39,487,000 33,085,000 27,998,000 +19.35
Datatec 36,744,000 30,982,000 29,530,000 +18.60
Pinnacle 5,844,592 4,960,074 3,166,925 +17.83
Datacentrix 1,757,762 1,575,739 1,290,781 +11.55
Vodacom 66,929,000 61,197,000 58,535,000 +9.37
Altech 9,972,000 9,651,000 9,200,000 +3.33
Poynting 80,970 81,549 76,294 -0.71
Telkom 33,668,000 34,026,000 38,303,000 -1.05
Gijima 2,530,068 2,566,582 2,943,417 -1.42
Huge Group 388,854 523,772 573,516 -25.76

MTN (year end December 2012), Reunert (year end September 2012), Blue Label and Business Connexion (both year end August 2012) have not issued results for their 12 month, year-end period.

EOH – the biggest boom

Of all the companies investigated, EOH revealed the largest growth in revenue over the past financial year, up almost 50% to R3.64 billion in 2012, compared to R2.43 billion in 2011.

In reporting its year-end results, EOH said that all areas of its business operations have seen strong growth during the period under review, with a further shift to services in line with its strategic intent.

The company’s main growth areas included infrastructure and application managed services; cloud offerings; enterprise applications; information management; business process outsourcing; security and intelligent infrastructure.

EOH’s operating profit grew to R356.62 million, up from R233 million, while EOH declared a dividend of 70 cents, 32.6% better than 48 cents in 2011.

Altech – fighting spirit

In its reporting for the year ended February 2012, Altech posted a 3.33% increase in turnover to R9.97 billion for the year, up from R9.65 billion in 2011.

While still showing growth in revenue, Altech’s results were marred by its operations in East and West Africa which experienced a tough trading period with financial performance below expectations.

Altech announced on 26 September that it had shed 75% of its stake in West Africa, while holding onto the belief that there is potential for growth in East African operations.

In its most recent reporting, Altech’s revenue increased by 6.8% to R5.2 billion for the period six months ended August 2012, but operating profit before capital items was 13.5% lower than that of the prior period, mainly due to losses incurred in Altech’s operations in East and West Africa.

Poynting – marginal loss

While reporting huge growth in profits for the year ended June 2012, antenna manufacturer, Poytning, actually posted a marginal loss in revenue for the full year period, with it’s defence division (which makes up most of the company’s profits) seeing a slowdown.

The antenna manufacturer reported that profit from continuing operations increased from by 51.83%, to R7.233 million, but revenue declined marginally to R80.97 million, from R81.54 million in 2011.

“The substantial increase in group profits was achieved, despite a slightly reduced overall turnover and substantial reduction in defence division profits,” Poynting said.

Poynting is divided into three divisions, namely the defence, commercial and cellular coverage divisions. Of the divisions, the commercial side is set to become profitable only in 2013, while the cellular coverage is still a small operation, which is expected to blossom with the advent of next-generation networks.

Huge Group – huge loss

In reporting its full year results for the year ended February 2012, AltX-listed Huge Group, which holds Huge Telecoms and Huge Media, announced revenue for the full financial year was down R134.9 million, or 25.76%, from R523.8 million to R388.9 million when compared to 2011.

This equates to a 25.76% loss in revenue at the company during the reviewed period.

“During the year under review, Huge focused on completing the restructuring of its business operations with the result of a reduction in costs; this had the effect of turning around the operational performance of the company for the 2012 financial year,” Huge Group said at the time.

In its reporting, the group pointed to tough conditions in the telecoms climate, as well as the disposal of its Namibian operations, as contributing factors.

In its most recent statement, the group said it expects an increase of at least 800% in headline earnings per share (HEPS) for the six months ended August 2012, anticipating HEPS of 8.72, up from diluted HEPS at 1.09 cents in 2011.

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Biggest growth in SA tech companies