JSE-listed Business Connexion (BCX) on Tuesday reported a profit of R301-million for the financial year ended August 31, up from R233-million in the prior financial year.

This translated into an increase in diluted earnings a share, from 44.5c in 2013, to 64.5c for the 2014 financial year.

Diluted headline earnings per share (HEPS), at 23.6c, were, however, lower than the 34.1c of the prior period.

On a normalised basis, primarily excluding the sale of QLink and the impact of the amortisation of intangible assets, diluted HEPS were 39.8c, compared with 45.1c in the 2013 financial year.

Further, BCX reported a 7.2% increase in organic revenue from new enterprise client wins, reflecting the return from the group’s focus on an improved sales culture and cross selling, while reported revenue grew by 5.5% to R6.51-billion.

Earnings before interest, taxes, depreciation and amortisation were also up 17.8% to R660.3-million, while BCX’s operating profit increased 30.4% to R420.8-million.

DIVISIONS
BCX noted that its Services division had grown its revenue by 6.4% to R2.29-billion in the year under review, mainly as a result of new business won and further client renewals.

Meanwhile, the UCS division’s revenue increased by 9.6% to R1.28-billion, while its operating profit increased to R108.2-million, from R100.4-million in the prior financial year.

However, revenue from BCX’s Canoa division declined by 3.2% to R1.08-million and its operating profit decreased to R99.2-million, from R116.1-million the year before.

“Despite a number of key client wins in the managed printing space, the results were impacted by weaker performance from the hardware business, coupled with lower margins,” BCX explained.

Further, the Technology division achieved strong organic revenue growth of 19% to R826.4-million, while revenue in BCX’s International division grew by 28.8% to R685.5-million, representing strong revenue growth in the African countries where BCX had a presence.

The company’s Innovation division, meanwhile, reported a decline in revenue to R347-million, from R508.7-million in the prior year, as a result of the sale of QLink and the joint venture transaction with Northgate Arinso.

“The industry dynamics are set to change significantly in coming years, driven by continuing market consolidation and a fundamental shift to the cloud and the ‘Internet of Things’. This will present new and exciting opportunities for BCX,” the company said.

Further, BCX noted that it would continue to actively position itself to create value for its clients through innovative and industry-specific solutions. 

“BCX has taken a proactive look internally to ensure agility and organisational efficiency.

“Following the successful focus on sales effectiveness and growth, the group is now embarking on a number of initiatives focusing on increasing margins through operational efficiency.

“The mergers and acquisitions strategy will continue to focus on opportunities in the rest of Africa and [on acquiring] innovative solutions to enable the group to play a leading integration role in ‘The Internet of Things’,” BCX stated.