Huge looks to banks for offerings to SMEs

Huge Group is considering partnerships with banks so that it can offer financial services products to its customer base of nearly 50,000 small and medium-sized enterprises (SMEs).

“We’re looking at disruptive service offerings that provide a solution to a community that previously did not have access to it,” Huge’s nonexecutive chairman, Duarte da Silva, told Business Day on Monday. Through its Huge Connect business, the group provides connectivity for payment platforms.

“We’re not a payments provider, but to get more involved there makes sense.

“The second thing is if we look at teaming up with a financial institution, we can target bespoke solutions for the SME community, rather than thinking of end-to-end banking,” Da Silva, a former Merrill Lynch analyst, said.

The group would consider products that gave SMEs access to the financial services industry and reduced banking costs for that segment of the market.

“We’d probably do this in partnership because we’re not a financial institution, but we’d probably white-label it,” he said.

REVENUES

Huge, which has been in discussions regarding a potential acquisition for 11 months, according to its cautionary announcements, said on Monday that its revenues in the year ended February rose 63% to R401m while net profits nearly tripled to R77m.

The share price, which hit a low of 40c in 2013, closed 2.3% up at R9 on Monday.

Da Silva said the group, which had increased its size after buying Huge Connect in March 2017, wanted to strike another relatively sizeable deal.

“We want to do something that’s 50% or more in terms of the turnover line to make it meaningful,” he said.

In its voice connectivity business, Huge launched its “full-suite telephony” offering — which includes outbound and inbound calls services — in late 2017 after preparing for it for years.

Da Silva said that product could now be sold to Huge Connect’s customer base.

The group was now in a healthier position, he said.

“What we think, frankly, is for the first time we’ve got a proper ticket to the ball game.

“It’s a completely different business,” he said.