Dialogue rides call-centre wave

12 March 2007

Call-centre outsourcing company Dialogue Group has reported a huge increase in profits on the back of a growing demand for outsourcing services in South Africa.

Business day reported last week that Dialogue’s profits for the year to December 2006 had increased by 309% compared to 2005, to R15.6-million.

The company, with listed on South Africa’s small-cap exchange AltX last September and currently has a market capitalisation of about R320-million, reported an increase in revenue of 55% or R121-million over the year.

Dialogue chief executive Jason Drew told Business Day that the call-centre industry was starting to “boom in South Africa”.

He attributed the company’s increase in earnings to the strong demand for call-centre services in South Africa, adding that the firm had also aggressively pursued new contracts and the expansion of existing contracts with both local and international clients.

“We took a bet three years ago that South Africa would be the next international outsourcing destination,” Drew said.

He pointed out that India, serving mainly the UK and European markets, and the Philippines, which mainly serves the US market, were moving towards full capacity, and that this presented an opportunity for South Africa.

“SA serves both UK and US clients,” Drew told Business Day. “SA is great because there is cultural proximity to western markets – the time zone in SA helps a great deal with the UK, and South African accents are clearly understood by UK people.”

Drew added that the demand for the company’s shares had been strong since listing, with the share price increasing between 40 and 50%, from a placement price of R1 a share to between R1.40 and R1.50, over the past six months.

He said that company was confident of meeting its prospectus profit forecast of R19-million for 2007/08, adding that the firm was already building more capacity in Johannesburg to expand operations.

“More and more international companies are seeing the benefits of doing business in South Africa,” Drew said.

SouthAfrica.info reporter

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