The Dialogue Group will be the country's first outsourced call centre operation to list on the Johannesburg Stock Exchange when it makes its debut on Tuesday, next week.

Dialogue chairman Jason Drew says the group expects to continue the explosive growth it has seen since it started three years ago, as it continues to scale up its operations and more international businesses look at outsourcing their call centres to this country.

The group plans to raise about R51 million through its listing on the JSE's AltX, which is designed to help entrepreneurial companies list without the expense and rigorous requirements of the main board. The listing will commence with the placement of 39 999 300 ordinary shares at 100c each, minus listing expenses of about R2 million.

Luke Mills, executive director of Western Cape government-sponsored call centre body Calling The Cape, says: “This listing will definitely raise the profile of the industry in the Western Cape and the country as a whole. The Dialogue Group has been a great success story as they started just three years ago with 30 people and now have 1 500 in their employ. They are certainly showing the route others would like to follow.”

Dialogue says in its prospectus that revenue for the year ended December 2004 grew by 391.1%, to R43.408 million, compared to the 10 months before. Then it jumped by 80.3%, to R78.225 million, in the next year and surged by 38%, to R44.432 million, for the six months to June 2006. Gross profit margins were between 36.7% and 41.8% over those periods. Drew says while the profit margins look spectacular, he expects them to increase further.

“At the moment, our earnings before depreciation, interest, taxes and amortisation is between 8% and 12%, while our international peer group, which has been in the business for much longer, is standing at about 20%. So there is still plenty of room for us to grow.”

Drew says that apart from the classic reasons for outsourcing call centres to SA, such as a common time zone with Europe, cultural affinity and highly developed infrastructure, many international companies are impressed with the country's financial services regulatory regime.

“Telecommunications costs have also come down dramatically, especially on voice. However, data costs, which have come down by between 40% and 60% over the past couple of years, need to fall by about the same amount again,” he says.

Dialogue's local clients include MTN and Absa, and international clients include Barclays Bank and British American Tobacco.

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