Yes, but how’s business?
THE RECENT TRADING statement from Business Connexion (BCX) was edifying – up to a point. For example, we’re told that basic earnings per share are expected to be up to 10% higher. That’s probably not bad in the current tight business climate. But then the information communication technology (ICT) group tells us that headline earnings per share are anticipated to be 30% to 40% lower. Whoa – that doesn’t look so good.
However, BCX goes on to explain the decline in HEPS is attributable to a R15,7m special tax on companies payment in relation to the special dividend of 60c/share it declared at the end of its previous financial year, as well as R24m “relating to the group’s revitalisation programme”.
Okay, that’s understandable. But here’s the clincher. Explaining the difference between basic earnings and HEPS, BCX goes on to say there’s a profit of R14,4m from the sale of a property included in its basic earnings but not HEPS.
Well, at least we have an idea of where the money is coming from and where it’s going. But what investors really want to know is how is the ICT business doing, at which BCX claims to be the leading “integrator” in Africa. Its trading statement doesn’t help much in that regard.
Like many computer groups, BCX’s share price has been under pressure, falling roughly in line with the market (26,5%) over the past year. The big slump came in October, taking the price from its high for the year to near its low.
That was a month before the end of the interim period, so the market might have gauged what would be in the numbers – and didn’t like it. But the slump also coincides with the announcement on 23 October that industry stalwart Peter Watt, former CEO, had resigned as a non-executive director.
Investors will have to wait for the release of interim results on Thursday, 12 February to decide if BCX is being “revitalised”.