Finweek English Edition - - Companies & markets - BELINDA AN­DER­SON

EM­POW­ERED IT re­cruit­ment com­pany Para­con is well placed to ben­e­fit from the sec­tor’s skills short­age. A re­cent run in its price, from be­low 160c in early Jan­uary to 210c/ share puts it on a fairly high his­toric price:earn­ings of 18 times. How­ever, earn­ings growth this year of at least a sim­i­lar mag­ni­tude brings the for­ward p:e to a more re­spectable 13,3 times.

Though in only small amounts, CEO Mark Jur­gens re­cently bought some of the com­pany’s shares – al­most al­ways a good sign for share­hold­ers.

Para­con re­cently re­leased its an­nual re­port and held its AGM on Fri­day, 16 Fe­bru­ary, for share­hold­ers to vote on, among other things, the 8c an­nual cap­i­tal dis­tri­bu­tion (up 33%).

Re­sults last year to Septem­ber showed 36% growth in head­line earn­ings per share to 11,6c on turnover up 19% to R635,4m. It gen­er­ated R56m in cash from op­er­a­tions and had R115m on hand. Man­age­ment has long boasted ef­fi­cient debt col­lec­tion and good cash con­ver­sion. OP­POR­TU­NI­TIES Its re­sourc­ing di­vi­sion, ac­count­ing for 79% of turnover, should con­tinue to be driven by a de­mand for ICT pro­fes­sion­als. To build fur­ther on its re­la­tion­ship with Di­data, which owns 27,4% of Para­con. • Growth last year was or­ganic, but this year should also

be boosted by three re­cent ac­qui­si­tions. RISKS • The lack of skilled ICT pro­fes­sion­als. How­ever, the Ni­hi­lent deal should help it to source th­ese from In­dia if nec­es­sary.


Source: I-Net Bridge

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