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Mvelaserve expands into mast business
Wednesday, 18 April 2012 00:00
Written by Nicola Mawson
Listed diverse outsourced business support services company, Mvelaserve, has bought 80% of cell mast maintenance provider, LTP Mast and Infrastructure, for R14 million, in a bid to grow its business activities and expand its margin.
Mvelaserve last month reported its results for the six months to December and said revenue gained 14%, to R2.5 billion. However, profitability was hit by ongoing restructuring in the catering and cleaning operations, and the costs involved in bedding down newly-acquired companies.
Profit from continuing operations slumped from R46.9 million a year ago, to R21.9 million in the first half of its new financial year.
CEO Jorge Ferreira says the company bought LTP to further diversify the group, which offers security through Protea Coin, facilities management through TFMC, Royalserve catering and cleaning, Contract Forwarding freight services, water purification through SA Water, and IT support and services unit Circle ICT.
Ferreira says the unit, which had been subcontracted by its TFMC business, will also add to margins and will become a standalone unit within Mvelaserve. Although the unit was only bought in September, it is returning margins of 18%, he adds.
LTP contributed R13 million in revenue and an operating profit of R2 million to the first half of the year’s results.
“Although start-up operations find it challenging to deliver against bullish expectations in a negative economic climate, we remain positive that these investments will ultimately contribute positively to the group’s financial indicators,” says Ferreira.
Relative newcomer Circle ICT is still finding its feet, although it has a healthy order book, says Mvelaserve.
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