FINANCIAL INSOURCING SPECIALISTS
PRESS RELEASE
Recent discussions with public sector entities have focussed on their concerns
about an inability to effectively manage working capital and in particular the
revenue and collection cycle. Historically our service has been aimed
exclusively at the "mega" risk management solutions required to support a
client's treasury operation. We have never involved ourselves in the underlying
"micro" financial management of our clients. Given however that our target
market covers a far broader spectrum than we have historically serviced we had
to come up with a solution that meets the needs of our diverse client base.
This is essential as our service is designed to support the initiative of the
public sector in raising finance to meet the social and economic needs of its
customer base.
It is a harsh reality that the largest percentage of potential clients are
experiencing working capital management problems. This results in a very weak
foundation for their treasury activities and therefore excludes them as a
potential client at the treasury/risk management level
We take our commitment to build capacity within our client base very seriously.
It is critical that we create firm foundations at the micro level and introduce
credit enhancement capability through enhancing the income generators of their
business. We feel so strongly about the importance of the correct micro
environment that it will form a cornerstone of our marketing activities and has
been incorporated into the name of a new division that has been created to meet
this need.
The new division is called MICROmega. As its name suggests MICROmega will
provide its solutions to both small and large entities but with the dominant
focus on getting the "micro" basics in place to underpin the "mega" treasury
and risk management activities. The MICROmega division is strategically
important in that it provides a natural feeder for our holistic treasury
services while simultaneously providing an information platform to generate one
off debt origination or refinancing solutions during the capacity building
development phase.
As a fast start to this new division we have acquired Consolidated African
Technologies (Pty) Ltd ("CAT"). CAT currently provides revenue management
solutions through the use of technology to approximately 250 local authorities
and large utilities such as ESKOM and Rand Water. CAT's services have been
broadly accepted over the past 10 years and extend throughout the SADC region.
The purchase consideration is dependent on profit warranties for two years and
has been set at a level that ensures a minimum growth of 100% in earnings per
share for the new shares that will be issued in settlement of the purchase
price. A maximum of 1 million shares will be issued. On a weighted basis the
acquisition will provide a relatively modest earnings per share enhancement in
the current year if we assume that we do not exploit the "fast start
capability" that the acquisition provides. CAT has a significant strategic
value and provides a natural fit with the groups prevailing risk management
solutions for local authorities.
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
