Tue | Oct 23, 2018

tTech open to mergers or acquisitions

Published:Tuesday | May 22, 2018 | 10:56 AMSteven Jackson

 

Technology service provider tTech Limited wants to acquire or partner with entities in order to grow.

CEO Christopher Reckord sees opportunities to partner with overseas operators who want to avoid risk but grow in the region, and to acquire local outfits.

 “We have had several opportunities for partnerships and discussions with people for joint ventures and several opportunities even for acquisitions which we continue to look at. We are actually looking for acquisition opportunities out there. The capital is there for either one or the other and I think we will use it,” said Reckord at an investor briefing last Friday.

The tech company made net profit of $6.7 million on revenues of $70 million for the March 2018 quarter Profit rose 50 per cent year on year. It now holds $133 million in unappropriated or retained profits, while its cash holdings topped $115 million in March.

Company founder and chairman Edward ‘Teddy’ Alexander said a deal with tTech would be a less risky market entry strategy for an overseas investor.

“The truth is that countries like Jamaica in the eyes of North American companies are seen as high risk countries. So they are a little reluctant to enter those markets,” said Alexander. “The company might want to enter this market will be keener to engage with a local partner on the ground because it helps to derisk their investment and also alleviates some amount of cost.”

Financial and technology outfits in North America see developing countries as a threat to their compliance with their own regulators, due to fines often outweighing the value of the business, whether or not they are affected by scammers or hackers.

For now, tTech has ruled out a stock split — its shares closed at $6 on Monday — with Alexander noting that the issue may be revisited in the future, but for now the company is focused on growth. The stock listed in 2016 at $2.50 per share.

The tech services provider and consultant recorded a drop in revenue last year, from $223 million to $217 million. However, first quarter sales ending March 2018 were up substantially from $56 million to $70 million

During the quarter, tTech closed a major deal to provide a private internal telephone system to a client with operations in Jamaica and other parts of the Caribbean. In the coming quarters, it plans to deliver expanded services to another unnamed client with operations in the United Kingdom. Food and financial services conglomerate GraceKennedy remains one of tTech’s largest customers.

steven.jackson@gleanerjm.com