(The Herald) Communications and information technology group Celsys is ready to swoop on two companies which will bring valuable technical expertise to the group and increase its product offering in the IT sector.

In its financial statement for the year ended December 31 2006, the group said: “Management is at an advanced stage of talks with two potential acquisitions which, though small, will bring on board valuable technical expertise to the group and increase our product offering in the IT sector.”

On its operations Celsys said the communications division continues to be the largest contributor to group revenues mainly driven by income on the instalment credit scheme for the payphones.

The group said the finance charges are inflation linked, shielding the company from fluctuations in the economy.

In the period under review, interest income from contracts amounted to $2,082 billion from a debtor’s base of about $680 million in June last year.

However, there are a number of internal structural changes in the cellphone division, which negatively impacted on the volume of cellphone sales during the period. As a result, cellphone sales dropped by 67 percent over the comparative period.

On Celsys Print, the company said demand for recharge cards and cheques remained high while volumes increased by 54 percent and 27 percent respectively.

However, the lower cellphone tariffs in inflation adjusted terms put pricing pressure on the recharge cards which resulted in lower margins, noted the group.

During the period under review, the IT and communication group posted an operating profit of $1,7 billion from $86 million of the prior year.

Turnover for the year rose from $176 million to $2,9 billion for the financial year ended December 31, 2006. Attributed profit surged from $53 million to $1,1 billion, while basic earnings per share increased to $0,73 from the previous figure of $0,06.

The board also appointed Mr Gary Shayne as a non-executive member, freeing him from his duties as executive director for business development.

“He continues to participate in the company through his chairmanship of the investments committee of the board drawing on his vast experience in the industry,” noted the company.

Formed in 1996 at the start of Zimbabwe’s cellphone revolution, Celsys was listed on the Zimbabwe Stock Exchange in 2003.

It is one of the leading players in the cellular communications, security printing and information technology sectors in Zimbabwe.

Its subsidiaries include Celsys IT, Celsys Print and Celsys Comms.