The Maxim Investment Group (MIG) has rolled out its new action plan that seeks to prioritise markets where the company can be relevant and grow sustainably in the long term.
This will also see the company work to boost its growth potential, while leveraging the value of its infrastructure, and increase agility and improve efficiency.
In a press conference on Wednesday, MIG Chairperson Mohamed Karrar said that the macroeconomic and market realities, and high competition in the market, require an increasingly demanding allocation of capital.
If in the past the low penetration of services assured future growth, the current maturity of the market and the appearance of new competitors subject to different rules demand a highly focused strategic approach.
The changes come at a pivotal time for MIG, whose portfolio is estimated at the EGP 15bn range by Financial Consultants accredited by the Central Bank of Egypt (CBE).
The company has grown at an exponential rate over the past decade, bringing with it operational inefficiencies as by product of a rapid growth focused strategy.
The transformation initiative, which commenced in 2019, tackled the problems of: suboptimal performance with the objective of driving rapid change; delivering improvements in cash; working capital; and profitability.
The roll out includes: consequential decisions in short order; rapidly modifying business models; accelerating digital transformation; seeking out new revenue streams; moving or re-thinking operational activities; entering new markets; and improving customer experiences.
Karrar added, “The [novel coronavirus (COVID-19)] pandemic added a layer of challenges to that process, as we were forced to slow down the roll out and consider the implications on our strategic priorities moving forward.”
The COVID-19 pandemic has brought about profound change, affecting long-standing consumer behaviours and preferences, and in some cases permanently changing competitive landscapes.
“Nevertheless, during the past two years, we have made meaningful progress and opened the door to becoming a vibrant, profitably growing company,” Karrar added.
With a plan adapted to reflect the new market realities Karrar believes that now is the time to charge through that door. The aim will be that by the end of 2022, MIG will reposition its overall cost structure to establish itself as a strong and efficient competitor.
He further elaborated that these measures will generate, among other effects, additional revenues and an increase in operating cash flow margin by 2022. The new action plan will serve as a catalyst for the transformation of the company.
“The first initiative, launched in 2019, revolved around achieving operational efficiency, whilst the second initiative constitutes the creation of a new structure that is based on four business units, Development, Hospitality, Commercial and Retail, and finally Services,” Karrar said, “These four business lines concentrate approximately 90% in revenues and operating cash flow.”
He added that the third initiative will focus on prioritising strategic, long-term investment to secure sustainable growth and stability. The plan prioritises most investments in these four business lines, improving the products and services offered to customers, leveraging the existing infrastructure in relevant markets and with potential for growth in this new era.
The fifth initiative responds to the need of gaining agility in the implementation of the necessary changes and providing better service to customers, while taking advantage of the scale and synergies of the group.