| Wed 3 Nov 2010, 12:45 | | SKJ - Sekunjalo Investments Limited - Press Release |
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SKJ
SKJ
SKJ - Sekunjalo Investments Limited - Press Release
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 1996/006093/06
Share code: SKJ and ISIN: ZAE000017893
("Sekunjalo" or "the Group" or "the Company")
PRESS RELEASE
3 November 2010
TOP RANKED BLACK ECONOMIC EMPOWERMENT COMPANY DELIVERS EXCELLENT RESULTS
Top-ranked JSE listed empowerment company Sekunjalo Investments Limited
("Sekunjalo") today released its annual results - posting headline earnings per
share of 2. 64c.
The group`s strong earnings were powered by a massive restructuring programme
marking a turnaround in its key marine business, strong operational performance
in its IT division, while significantly reducing costs throughout the group.
CEO, Khalid Abdulla says "amid the global recession and subsequent weak recovery
the Group took the opportunity to significantly reduce its finance costs,
renegotiated prices and improve efficiency to deliver excellent results".
Abdulla says "the Group also significantly reduced its exposure to the strong
rand, preempting the currency`s strong gains by renegotiating better prices in
its export markets. Currently only a quarter of the Group`s earnings are derived
from international markets".
Abdulla believes the feather in Sekunjalo`s cap in what has been extremely tough
trading conditions, is the fact that it has managed to save more than R30m in
costs and improve the Group`s gross margin to 28% from 23% the year before.
Abdulla says "it`s no exaggeration saying that the financial year under review
was probably one of Sekunjalo`s most significant years in its history".
While the Group relentlessly worked towards improving efficiencies which Abdulla
believes is instrumental in growing the Group`s asset base, Sekunjalo also
completed probably one of the most significant deals in its history with Saab
SA.
Saab is a respected multi-national that provides expertise across numerous
private and public sector spheres from electronic warfare, sensor technology,
command and control systems, training systems, radio communication, aviation and
support solutions. South Africa is Saab`s biggest market outside Sweden. The
deal sees Sekunjalo securing 25% of Saab SA`s voting rights and a 5% economic
interest with an option, linked to Saab SA`s performance over the next five
years to extend the economic interest to 25%.
The timing of the Saab deal couldn`t be better according to Abdulla, as the
company looks to expand into South Africa and Africa. At a time when we are in
the midst of a global economic rebalancing all eyes are on Africa with a largely
untapped market of more than one billion people.
Esp Africa, the group`s media arm, has taken the lead by expanding its African
footprint with events planned in Luanda, Gaborone and Mozambique in the
forthcoming year.
Abdulla says "the Saab deal has already opened many doors for potential
opportunities across the continent and the opportunity to exploit Sekunjalo`s
capabilities in the IT and medical sectors in new markets".
As Sekunjalo is an investment holding company, the Saab deal is also significant
as it goes a long way towards achieving the Group`s strategy of becoming South
Africa`s preeminent partner of choice for multinational companies looking to
expand into Africa.
The Saab deal is the second deal under the Group`s Strategic investment arm,
having signed a similar deal with British Telecoms SA ("BT"), the local division
of the UK telecommunications giant in 2008.
BT performed extremely well during the year and is expected to exceed budget
expectations. It looks extremely well positioned to grow aggressively over the
next few years.
While the Group will actively seek strategic partnerships aligned with it`s
strength and capabilities, the Group consistently re-evaluates its existing
portfolio of investments.
The Group`s biggest turnaround was in its marine division, which posted an
operating profit and reduced the cost base by 18%. The Group plans to
capitalise on this through expansion by acquisitions and partnerships.
The Goup also achieved a marked improvement in its IT businesses. The Sekunjalo
TSG group revenue increased during the 2010 financial year. The growth was
primarily organic, although the acquisition of Digital Matter during the 2010
financial year has added to the numbers.
IT appears to be one of the strongest growth prospects among the Group`s
portfolio. Sekunjalo currently provides IT systems to 40% of state hospitals in
the country, predominantly based in Gauteng and Western Cape. Sekunjalo stands
to benefit significantly from the proposed National Health Initiative (NHI) and
other public sector business through intelligence gathered from existing
contracts, established networks and proven capabilities.
Abdulla says "the Group will focus on three main priorities going forward:
* Actively pursuing strategic partnerships in which Sekunjalo is able to
influence business and add value with a long term vision of
positioning the Group as a partner of choice in South Africa
* Expanding the marine business through acquisitions and leveraging
strong margins;
* Expanding and providing innovative offerings in IT and biotechnology -
both having strong growth potential in South Africa and Africa".
Abdulla says "one of the company`s main competitive advantages which also played
a crucial roles in its strategic investments is its strong focus on people and
stewardship, which adds to the underlying value of the business".
The company was founded on the principle of developing skills, becoming an
employer of choice and creating employment and the Group has never waivered from
building long term value regardless of market conditions and profitability.
Cherie Hendricks, Corporate Affairs and Sustainability Director says developing
people and communities is hard-wired into the group`s processes. She says while
Sekunjalo achieved excellent results, it has made significant contributions in
the various Corporate Social Investment and Sustainability programmes,
predominantly in the underprivileged communities. Sekunjalo has active CSI
initiatives, like the bursary and education programmes, community upliftment
projects, sports development and arts and culture.
Abdulla says "this approach toward people and communities is ingrained in the
Group`s DNA and the company is projected to employ between 100 -300 people in
the fortchcoming year".
Looking ahead, Abdulla believes the company has a created a sustainable platform
for growth in the Group`s operating businesses and entrenching its position as a
partner of choice in South Africa.
ENDS
Contact details: Sekunjalo Investments Limited
Khalid Abdulla - Group CEO
Tel: 2721 427 1400
Cell: 082 892 7889
E-mail: khalid@sekunjalo.com
Adri Senekal - Strategy & Stakeholder Relations
Tel: 2721 427 1400
Cell: 071 871 7267
E-mail: Adri@premfish.co.za
Web address: www.sekunjalo.com
Directors
*Dr M Iqbal Surve (Executive Chairman); *Khalid Abdulla; Rev. Dr Vukile Mehana;
Mihe Gaomab, The First; Salim Young; *Cherie Felicity Hendricks; *Chantelle Ah
Sing
*Executive Directors*
Company secretary: Cherie Felicity Hendricks
Registered Address: Quay 7, East Pier, Victoria and Alfred Waterfront, Cape
Town, 8001,
email: cherieh@sekunjalo.com
Transfer secretaries: Link Market Services South Africa (Pty) Ltd,
11 Diagonal Street, Johannesburg
Auditors: PKF (Cpt) Inc, Cape Town
Sponsor: PSG Capital, Stellenbosch
Date: 03/11/2010 12:45:00 Produced by the JSE SENS Department.
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