Business Connexion Group Ltd HY 2014 results


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Business Connexion Group Ltd HY 2014 results

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Business Connexion Group Ltd HY 2014 results

  1. 1. OUR CORPORATE STRATEGY “Bring the voice of the customer inside the organisation” Our people Growing from an established mature market footprint into new markets Setting the new benchmark through differentiated solutions Harnessing the collective power and knowledge of the Business Connexion Group Harnessing value from productised solutions, repeatable processes and industry specific expertise Differentiate ourselves through industry specific IP and solutions Convergence of communication, applications and infrastructure to become cloud services – delivering solutions as a service anytime and anywhere Attract, retain and develop our talent Ourorganisation O urofferings Internationalexpansion Intellectualproperty Verticalindustryfocus Industryconvergence FINANCIAL PERFORMANCE The group generated diluted earnings per share (EPS) of 52,0 cents for the six months (2013: 19,5 cents) and diluted headline EPS for the six months of 15,6 cents (2013: 19,0 cents). On a normalised basis, excluding the effects of the sale of Qlink, diluted headline EPS is 20,7 cents (2013: 21,3 cents). The increase in return on total equity to 18,0% (2013: 7,5%) and the return on total assets to 18,0% (2013: 9,2%) are largely as a result of the sale of Qlink and the share buy-back programme initiated in November 2013. BCX is committed to reach a sustainable return on total equity of 17% over the medium term through a combination of divisional profitability improvements, dividend cover maintenance, increased debt profile, share buy-back, M&A activity and African expansion. Revenue increased by 5,5% to R3 067,0 million for the period ended 28 February 2014. Excluding the sale of Qlink, revenue increased by 6,3% which was attributable to new business won during the period. Gross profit margins remained stable at 30,0% despite continuous market pressure. Operating expenses continue to be a focus area with normalised operating expenses increasing by 6,1% after adjustments related to the sale of Qlink. The tax charge included a capital gains tax of R26,9 million on the sale of Qlink. The group continued to generate healthy cash flows with cash generated from operations of R261,7 million before working capital changes. The normal dividend declared in November 2013 and paid on 20 January 2014 of 20 cents per ordinary share was consistent with that declared in the prior financial year. CAUTIONARY ANNOUNCEMENT BCX shareholders are advised that the board of directors of the company has entered into discussions, which, if successfully concluded, may have a material effect on the price at which BCX’s securities trade on the JSE. Accordingly, BCX shareholders are advised to exercise caution when dealing in BCX’s securities until a further announcement is made. For and on behalf of the board AC Ruiters LB Mophatlane Chairman Chief Executive Officer Midrand 11 April 2014 At Business Connexion we are passionate about making a difference in people’s lives by enriching communities, whether it be business, consumer, citizen or geographic. FOR FURTHER INFORMATION This short-form announcement is the responsibility of the directors and is only a summary of the information in the full announcement. Any investment decision should be based on the full announcement published on SENS and is also available on our website The full announcement is also available at our registered office and the office of our sponsor for inspection, at no charge, during office hours. Copies of the full announcement may be requested by contacting the Company Secretary on telephone 011 266 6630, email: or fax 086 571 4020. Executive directors: LB Mophatlane (Chief Executive Officer), V Olver (Deputy Chief Executive Officer), LN Weitzman (Chief Financial Officer), JR Jenkins Non-executive directors: AC Ruiters (Chairman)*, JA Bester*, A Darko*# , M Ettling*^, NN Kekana, J John*, M Lehobye*, D Sparrow *Independant non-executive directors # Ghanain ^ British Registered office: Business Connexion Park North, 789 16th Road Randjespark, Midrand, 1685 Postal address: Private Bag X48, Halfway House, 1685 Internet address: Transfer office and transfer secretaries: Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001 JSE Sponsor: One Capital, 17 Fricker Road, Illovo, 2196 Responsibility for financial statement preparation: Mr. Lawrence Weitzman CA(SA), the chief financial officer is responsible for the condensed consolidated interim financial information and has supervised the preparation thereof. Business Connexion Group Limited (Incorporated in the Republic of South Africa) (Registration number: 1988/005282/06) (Share code: BCX) (ISIN: ZAE000054631) ("Business Connexion" or "the company" or "the group") For more information please visit our investor relations website at Condensed consolidated statement of comprehensive income Reviewed Reviewed Audited six months six months 12 months ended ended ended 28 February 28 February 31 August R million 2014 2013 2013 Revenue 3 067,0 2 907,3 6 173,3 – Continuing operations 3 067,0 2 859,4 6 074,1 – Discontinued operations 47,9 99,2 Cost of sales 2 146,1 2 031,3 4 305,1 – Continuing operations 2 146,1 2 012,0 4 263,8 – Discontinued operations 19,3 41,3 Gross profit 920,9 876,0 1 868,2 Operating expenses 620,6 730,9 1 545,6 – Continuing operations 620,6 722,5 1 529,5 – Discontinued operations 8,4 16,1 Operating profit 300,3 145,1 322,6 Share of (losses)/profits from associate (2,1) 1,6 Operating profit before investment income 298,2 145,1 324,2 Investment income 17,2 14,4 27,6 Profit before finance costs 315,4 159,5 351,8 Finance costs 17,7 9,7 25,5 Profit before tax 297,7 149,8 326,3 Taxation 73,3 48,4 93,3 Profit for the period 224,4 101,4 233,0 Profit attributable to: Equity holders Profit from continuing operations 203,1 58,2 149,1 Profit from discontinued operations 20,2 30,0 203,1 78,4 179,1 Non-controlling interests Profit from continuing operations 21,3 23,0 53,9 21,3 23,0 53,9 Total attributable Profit from continuing operations 224,4 81,2 203,0 Profit from discontinued operations 20,2 30,0 224,4 101,4 233,0 Other comprehensive income: Translation of foreign operations 1,4 1,3 13,1 225,8 102,7 246,1 Total comprehensive income attributable to: Equity holders 204,2 79,7 191,4 Non-controlling interests 21,6 23,0 54,7 225,8 102,7 246,1 Earnings per share From continuing and discontinued operations Basic earnings per share (cents) 52,3 19,6 44,7 Diluted earnings per share (cents) 52,0 19,5 44,5 Calculation of headline earnings (R million) Profit attributable to equity holders 203,1 78,4 179,1 Profit on sale of business (171,8) (84,0) Loss on sale of property, plant and equipment 0,5 2,4 Reversal of impairment on investment (4,2) Impairment of goodwill 2,4 2,4 40,1 Bargain purchase on acquisition of subsidiary (0,1) Tax effect of headline earnings adjustments 26,8 (0,3) Headline earnings 61,0 76,6 137,2 Weighted average number of shares in issue (’000) 388 873 400 446 400 570 Diluted weighted average number of shares in issue (’000) 390 815 402 660 402 602 Headline earnings per share (cents) 15,7 19,1 34,3 Diluted headline earnings per share (cents) 15,6 19,0 34,1 REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 28 FEBRUARY 2014 AND CAUTIONARY ANNOUNCEMENT Revenue increased by 5,5% to R3 067,0 million EBITDA increased by 61,8% to R421,8 million Operating profit increased by 107,0% to R300,3 million Cash generated from operations increased to R261,7 million Normalised diluted headline earnings per share of 20,7 cents (2013: 21,3 cents)