Simeka Business Group wants to tap into growth opportunities on the African continent within the next three to five years.
The company, which will shortly change its name to Morvest Business Group, on Friday reported an increase in revenue to R411.1 million for the six months to November, a 10% gain year-on-year. Headline earnings improved to R23.2 million, from R22 million a year ago.
CEO Mohammed Varachia says the six months were “tough”, but an improvement on the expected flat position. He explains the benefits of the company's rationalisation are starting to flow through to improved earnings.
In the year to May 2010, revenue dropped 8.8%, to R685.7 million, while net profit almost halved, going from R57.7 million, to R30.3 million.
Varachia says the company will focus on consolidating its position in SA over the next year, but in the next three to five years, it wants to grow its share of revenue from Africa. Currently, local revenue accounts for 90% of turnover, with the balance being generated from its African operations.
The empowered group is involved in outsourcing, business support services and technology. It has been listed on the JSE's Alternative Exchange since 2004, and has a presence in SA, Africa, the Middle East and the UK.
New business
During the half-year, Simeka established a subsidiary and concluded a joint venture in India in a bid to counter international pricing pressure. The company says this will enable it to take advantage of “lucrative and sustainable” business opportunities throughout Africa and serve as a disaster recovery site.
Varachia says the company expects good growth from its technology subsidiary in the next three years. He says this is a focus area and Simeka wants to capitalise on niche markets.
Simeka expects technology to be its biggest growth area over the next three to four years and the company has launched its IT offerings into Africa on the back of its Nigerian operation, says Varachia.
The company established its Nigerian operation, INGR Technologies, during the previous financial year. The new unit expects to see demand from the power, process and marine sectors as well as for geospatial technology.
Nigeria is starting to take off and delivered good results despite the challenges faced, caused by a slowdown in new orders due to the SIM card registration law, says Varachia. He expects good results from the unit in the next three to four years.
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