| Tue 19 Sep 2006, 13:30 | | STRONG PROSPECTS FOR ALTX DEBUTANTE DIALOGUE GROUP |
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STRONG PROSPECTS FOR ALTX DEBUTANTE DIALOGUE GROUP WITH HEALTHY CONTRACT BOOK
Since scooping the largest local call centre contract to date worth R106 million with MTN, Dialogue Group has secured another R24 million worth of new contracts. Dialogue was SA's largest privately-owned independent call centre operator until its debut on Altx this morning that invited the public to participate in the company. The share listed strongly at R1,40, higher than the R1 a share price in the pre-listing private placement, to give Dialogue a market capitalisation on listing of R294 million.
Investor confidence in the SA call centre market fuelled R1,1 million of trade, in which just under a million shares changed hands, two hours after listing. A substantially oversubscribed pre-listing private placement showed the market's keen interest in Dialogue. The shares in issue are split approximately as to 26% held by management, 20% by institutions including Old Mutual, Investec and RMB and independents and the 54% balance as free float across a range of private client managers and individual investors.
The company is well positioned to deliver value to shareholders with forecast revenue to December 2006 of R114 million, up 45,6% year-on-year. CEO Jason Drew says the growth is being driven largely by the extension of services to existing local clients and new international clients. This makes for a bright outlook to December 2007 with Dialogue expecting R64 million gross profit and headline earnings of R19,1 million.
He says the listing will enable the company to seize a larger share of the $130 billion global outsourcing market. "The R35 million raised before listing will enable Dialogue to increase capacity and develop new sites to service a growing client base." The
R35 million new capital forms part of the total R51 million placement. The balance comprises 16 million shares sold in the placement by backers of the company to facilitate the listing.
Since securing the MTN contract under three months ago, Dialogue's joint venture with Tlhalefang Placements - Interaction Call Centres - has taken over a million calls and increased the number of call centre agents on the MTN contract fourfold. "Our delivery ahead of MTN's benchmarks is an indication of our business approach and has seen the logical widening of their mandate to us," says Drew. Contracts for inbound customer response programmes for ABSA and MTN's Mobile Banking worth R24 million in aggregate, were concluded before this morning's listing. The contracts have been factored into the group's 2007 forecasts set out in its prospectus.
Looking to the offshore call centre outsourcing market, Dialogue's management believe that as SA is becoming a preferred outsourcing destination due to quality of service, efficiency levels and competitive costs, the group should see further growth from offshore clients.
Dialogue's 'BBB' EmpowerDex rating makes the group a leading contributor to transformation in the Business Process Outsourcing (BPO) industry. 74% of management comes from previously disadvantaged backgrounds. Drew says that further efforts will be made to increase BEE equity participation at group level.
He points out that call centre outsourcing is the fastest-growing sector in SA in terms of job creation. "Dialogue's expansion, to be funded by the monies raised on listing, will accelerate its contribution to employment." Last month alone Dialogue delivered 28 000 hours of training to its agents, reflecting its commitment to skills development in the industry. Drew believes that a share incentive scheme following the listing will further incentivise staff and attract new management talent, both of which he sees as critical to Dialogue's growth strategy.
Dialogue services local and foreign blue chip companies with a range of call centre services, from managing clients' in-house staff and technology through to full outsourcing at sites in Cape Town, Johannesburg and Durban. Founded in 2003 the group reached breakeven one year later in 2004, and then increased gross profit to R28,0 million for 2005. EBITDA grew from 8,4% in 2005 to 12,1% for the first six months of 2006 as a result of strict cost control and economies of scale.
Ends.
Issued by: Envisage Communications
Nicole Sacks
(011) 325 5944 / 083 287 2771
nsacks@envisagesa.co.za
On behalf of: Dialogue Group
Marc Spendlove, International Marketing Director
021 409 3700 / 083 700 52 53
marc.Spendlove@dialogue-group.com
Issue date: 19 September 2006
www.dialogue-group.com
