Africa internet firm wires for growth

African Lakes wants to spearhead e-commerce

African Lakes, the continent's cars to e-commerce group, has shrugged aside the gloom surrounding the dot.com sector to report healthy core profits and ambitious expansion plans.

African Lakes is on the verge of ditching its traditional businesses in plantations and car sales to focus on expanding its internet operations across Africa.

At a time when the collapse of another old economy firm which embraced the internet - Enron - has shocked the global financial community, African Lakes on Tuesday remained upbeat.

"This year has seen African Lakes restructure to create firm foundations to build a significant communications and technology company," the firm said, revealing gross profits up 75%.

"Our core infrastructure has been expanded throughout the continent of Africa reaching from Cairo to the Cape."

Rapid expansion

The firm's turnover in the year to 30 September rose 12%, Tuesday's results statement said.

Over the year, African Lakes expanded its internet operations into North Africa and the Middle East with the purchase of MenaNet, and began trials of in-store communications centres in partnership with CNA, one of South Africa's largest retailers.

An 'e-touch' centre in Nairobi

African Lakes is also planning to launch operations in Nigeria, a "potentially very lucrative market" to complete its entry into all major African markets.

The firm expects to complete the sale of its old-style trading businesses early in 2002, realising £7m ($5m) - or adequate funds "for the foreseeable future".

E-touch changes

Among the firm's more mature communications business, African Online, the IT Distribution Division and the Zimbabwean electronic transactions arm are now generating both profits and cash, the group said.

The firm forecast "good growth" at MenaNet, supported by further expansion at the unit's booming Egyptian operations.

African Lakes' Kenyan e-business division was forecast "to move towards cash sustainability in the latter half of next year".

It is changing the format of its internet drop-in centres, shifting towards fewer centres with higher usage.

'Connecting Africa'

For the full year to 30 September 2001, the group's sales rose to £31.7m ($22.2m) from £27.7m in the same 12 months of 2000.

Gross profits were up 75% to £8.7m ($6.1m) from £5m year-earlier though at the operating and pre-tax levels the firm made a loss.

The operating loss widened to £3.2m from £1.08m, but included a £1.2m charge for acquisitions.

"We are now positioned to exploit many growth opportunities in 2002 in pursuit of our objective of 'connecting Africa'," the company said.

The company also announced the appointment of Ambassador Nigali, a former Kenya high commissioner to the UK, to the board of Africa Online in Kenya.