06 Jul South Africa: Altron’s Bytes MS plans to double revenue to R2.4 billion
Bytes Managed Solutions (Bytes MS) will leverage the growth potential of the African market (including South Africa’s government sector) to increase its contribution to revenue amassed by its parent company Altron Africa across the continent.
This is according to Chad Baker, MD of Bytes MS, the man appointed ten months ago to lead the subsidiary.
Baker said the focus will be to supply solutions to South Africa’s banking and retail sectors because clients in these sectors are often more open to expansion.
“We operate in 14 African countries already where we service customers from South Africa into the rest of Africa. We have a footprint outside South Africa following the retail and banking sector at this point in time. That is a good differentiator for us because that’s where growth is coming from.”
Bytes MS has served the Africa market (beyond South Africa) for ten years, but will renew its focus in line with a new Africa strategy announced by Altron Africa in Q1 2018.
“We have a full investment strategy into the rest of Africa and it has been approved by the board of directors. It is not just a Bytes Managed Solutions strategy, it is an Altron strategy and all the operating companies go into it with one Altron vision where we used to operate in silos,” said Baker.
Altron Africa’s strategy is not to sell directly Baker explained, but rather to empower value-added resellers (VARs) in different countries with staff training and enhanced procurement processes to strengthen their service delivery to retail, banking and telecoms clients.
“We believe we will be a large contributor, at around twenty to thirty percent of total revenue for the rest of Africa strategy excluding South Africa.”
Growth through government business
Bytes MS plans to pursue opportunities within the South African government sector and double its revenue to R2.4 billion over the next five years.
The intention is to take on contracts from the South African government from 2019 onwards, although there are no immediate plans to start doing the same outside South Africa.
“Government is a new area that we want to engage quite aggressively on. We really believe we can bring a lot of value and a lot of excellence to the market,” Baker added.
He said Bytes MS will need to earn upwards of R300 million rand per year and increase staff by as much as 30% to double its profits.
According to its recent financial report, for the year to end February 2018, Altron achieved double-digit growth and increased revenue by 14% to R14,7 billion, while EBITDA grew by 19% to R1,1 billion and headline earnings per share (HEPS) from continuing operations increased by 19% to 135 cents.
CEO Mteto Nyati confirmed the company’s intention to supply more solutions to Africa. “We will also focus on deploying our local solutions into the African market and other emerging economies. We have a presence in over 25 countries through some of our operating companies, but our customers in those markets are not exposed to all that we can offer and how we can drive value for them. Our approach to the African market will be to ensure that our current customer base is exposed to our entire solutions offering while we explore acquisition opportunities which exist in our areas of focus.”