TECHNOLOGY company Morvest said on Wednesday it would diversify its business by seeking further expansions into the Africa and other parts of the world. New business opportunities will help the company reduce its reliance on the local businesses. Morvest already has a presence in South Africa, Mozambique, and Nigeria, India, United Arab Emirates and the US.
It said further expansion was a key strategic objective for the next 12 to 18 months, as significant growth opportunities in the emerging markets, primarily in outsourcing, information and communications technology (ICT), resourcing, training and education could offer an attractive counter to anticipated difficult conditions locally.
"Successful implementation of the group’s diversification strategy is a priority for the next financial year," said CEO Mohammed Varachia.
The company provides products and services such as SIM cards and scratch cards to cellphone operators, consulting, training and software.
Headline earnings per share for the year to May rose to 8.20c from 6.81c. Revenue increased 10.1% to R956.1m, with 96% of revenue generated in South Africa.
"Both the South African and Nigerian markets were challenging in the year notwithstanding some early signs of recovery. Nonetheless the group’s domestic operations performed well with reasonable improvements in margin," he said.
The group’s profit for the year increased to R23.5 from R22.9m.
The group’s business support division increased turnover to R606.4m from R529.9m.
Turnover from the ICT Solutions division almost doubled to R619.2m from R359.7m.
In 2012, Morvest added a new retail and consumer business division which included consumer financial services and travel management, cleaning and waste management, and solutions for e-commerce.
The new division is expected to be profitable in the next three to five years.
While Morvest directors the group had cemented a solid platform for long-term growth, the group warned the next 12 to 18 months would remain tough.
Morvest will implement a black economic empowerment (BEE) transaction that will see executive and nonexecutive directors of the company take a shareholding in the company.
The BEE transaction would bolster the company’s rating, Mr Varachia said.
"While the further improvement of BEE equity ownership seemed a challenge and the group’s BEE rating dropped to Level 3 in August 2013, this will be substantially addressed through successful implementation of the proposed BEE transaction," he said.
The board has declared a dividend of 1c per share.
