BCX reports strong earnings growth, solid cash generation

Business Connexion (BCX), the JSE-listed technology group being bought by Telkom, on Thursday delivered strong earnings growth and solid cash generation, which will help it pursue more opportunities.

The company reported a 25.9c diluted headline EPS in the six months ended February 2015 versus 20.7 cents in the same period in 2014.

The South African-based third largest listed software and computer services group continued to generate strong cash flows of R282m in the period compared to R259m in the same time last year.

The company, which has been focusing on aggressive acquisitions strategy, said as industry dynamics continue to evolve in the coming years, underpinned by market consolidation, there will be a fundamental shift to the cloud and the “Internet of Things”.

“This, together with the requirement for analytics, mobility and security will present opportunities for the group,” it said.

BCX, the largest employer of IT professionals on the African continent, has enough capital to pursue more growth opportunities and its balance sheet is not overly geared. The company, which is valued at more than R2.4bn, reported cash on hand of R189m versus R205m in the same period in 2014.

The company added: “Business Connexion is well positioned, as a leading IT service provider with broad industry expertise, to continue playing a leading role in the “Internet of Things”, across industry verticals and diverse business domains.”

BCX reported a 16% rise in revenues to R3.6bn, attributed to organic revenue growth of 15,1% resulting from new client wins. The company is being acquired by Telkom and the deal is still awaiting regulatory approval from South Africa’s watchdogs.

The deal has already been given a nod by four regional watchdogs – the Namibian Competition Commission, Tanzania Fair Competition Commission, Competition Authority of Botswana, and the Common Market for Eastern and Southern Africa.

The transaction is still awaiting approval from South Africa’s regulators – Competition Authorities; the Independent Communication Authority of SA (ICASA) and the issue of a compliance certificate by the Takeover Regulation Panel.

Telkom is chasing BCX to bulk up its information and communications technology business in order to address the technology and communication needs of South African businesses nationally.

BCX has operations in Botswana, Kenya, Namibia, Nigeria, Mozambique, South Africa, Tanzania and Zambia.

It is a leading IT service provider in South Africa, provides strong presence in East Africa and has an established presence in West Africa, which it continues to grow through aggressive acquisitions.

BCX is also the largest employer of ICT skills in Africa with close to 7 000 employees, who have vast experience in delivering large projects on the continent.

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