Black-empowered telecommunications group Celcom aims to list on the JSE's Alternative Exchange (AltX) towards the end of this month, with a market capitalisation of about R204 million.
Since AltX's "birth", three years ago, 30 companies have listed and it has a market capitalisation of over R5 billion.
Celcom Group CEO Stefano Brachini says the listing will provide the company with a platform for growth. While it has cash-on-hand of about R15 million, and is expecting to raise a further R23 million through a series of roadshows, listing provides the company with an opportunity to raise cash in future.
He says Celcom is highly cash-generative, an advantage he intends to leverage to expand the company geographically.
Brachini adds that the company already has a presence in eight African countries, but is looking to speed up its roll-out in East Africa by looking at organic and acquisitive growth. "Using our resources, we will shadow the network operators' own expansion into Africa."
He says the group will also assess acquisitions locally, an aim that will be aided by its heightened profile after the listing and BEE move. The International Telecommunications Union recently highlighted Africa as the fastest growing cellphone market globally.
The new capital raised before listing - at R1 a share - will be allocated to acquisitions already concluded such as the V Cellular Stores' franchise outlets.
Celcom, founded in 1994, will be 19.3% owned by a black consortium on listing. It also intends to set aside a further 6.6 million shares for sale to BEE partners, which will make the group 22.5% black-empowered. A further 2.6% will be held by a staff trust to take the group to the 25.1% threshold.
Marcel Golding, acting CE of e-TV and joint leader of the BEE consortium, chairs Celcom, while former ambassador to the US Franklin Sonn co-leads the BEE consortium.
Confident of growth
Celcom started out supplying basic cellphone accessories and has progressed to an integrated telecoms group offering mobile phones, accessories and enhancements, services packages, data-transmission and technology.
In a statement, it said it was "strategically aligned with SA's three major cellphone network operators - Vodacom, MTN and Cell C - and counts among its suppliers Nokia, Motorola, Samsung and Sony Ericsson".
The company's pro forma revenue to June was R465 million, which generated earnings of R18.1 million. It has forecast revenue of R684.3 million and core earnings of R22 million for the 2007 year.
By June 2008, the company is hopeful it will hit the R1 billion mark, taking core earnings to R27 million. Brachini explains that growth in profitability is more conservative than revenue growth due to the low margin sales in some of the group's highest growth businesses.
Celcom Group operates through five entities: mobile phone, enhancement and accessory firm Celcom; Virtual Payment Solutions, which does real-time electronic transfer and payment systems for prepaid airtime and other ticket applications; Go Mobile Communications, which offers cellphone services packages for the corporate market; Machine Logistics, which offers hardware and technology for data transmission between machines over cellphone networks; and V Cellular Stores, a telecommunications retail franchise outlet owner, comprising 13 Vodacom franchise stores.
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