Money – In Brief

Mergers, Acquisitions and Financial Results

- Profit margins at IT group Business Connexion have crashed in the six months to 28 February, making it look highly unlikely it will meet an earlier target management set of achieving an 8% operating margin in the 2011 financial year. Normalised operating profit margin fell to 3,8% from a full-year 2010 margin of 5,7%.Revenues at Business Connexion also fell in the six-month period, in part because of problems related to importing equipment from overseas to fulfil customer orders, a lack of tenders, especially from government, and weak economic conditions generally. The services division, the group’s biggest revenue contributor, felt the impact of corporate clients not spending as much on discretionary projects. Group revenue declined from R2,01bn to R1,87bn. Headline earnings per share collapsed from 28,1c to 9,4c as a result of pressure on attributable earnings and the dilutionary effect of a new black economic empowerment deal concluded last year.By mid-morning on Thursday, Business Connexion’s share price was trading down 1%. The counter has fallen 21,5% in the past three months

-JSE-listed technology and telecommunications group Altech has warned its profits in its financial year to 28 February 2011 will take a hit, in part as a result of poor economic conditions and a write-down in goodwill related to acquisitions in East Africa. Its headline earnings per share are expected to decrease by between 11% and 16% compared to its 2010 financial year. Basic earnings per share are expected to take a much bigger knock, falling between 55% and 65% over last year. It says the second half of the 2011 financial year showed “some improvement” over the first six months of the period.Meanwhile, Altech parent Altron has fared better in the same period. In a separate statement, Altron says its Bytes subsidiary, which plays in the IT services market, performed well in the 2011 financial year, exceeding expectations and achieving high growth in several areas of its business. The growth is as a result of improving corporate IT spend and market share gains.Altron expects headline earnings per share for 2011 to rise by between 12% and 17%; basic earnings per share will be between 3% lower and 3% higher.