Ayala BPO set for expansion, sustained growth

The Ayala group’s business process outsourcing (BPO) unit, LiveIT Investments Ltd., sees a sustained turnaround alongside continued growth through acquisitions.

LiveIT is set to announce today its purchase of a BPO company that will serve the UK market.

Through a newly formed subsidiary, LiveIT also seeks to enter the education space by investing in or teaming up with existing schools—or even building new schools—to contribute to skill-building for global competitiveness.

“We’re continuing to expand both organically and through acquisitions,” LiveIT chief executive officer Fred Ayala said in a press briefing on Friday after the annual stockholders’ meeting of parent company, Ayala Corp.

The new acquisition is seen to generate a higher revenue per head than the average BPO business, said Ayala.

Asked how soon the BPO business would make a significant contribution to the conglomerate, Ayala said LiveIT continued to make good progress in improving earnings before interest, taxes, depreciation and amortization (Ebitda), representing cash flow.

Ayala noted that this segment had achieved eight quarters of year-on-year growth in Ebitda.

Last year, Ebitda was up by 36 percent to $32 million or more than double the level in the previous two years.

“This last quarter of the year, we ended net income positive and we expect that trend to continue this year,” Ayala said.

LiveIT ended the fourth quarter of 2012 with a share of Ebitda near $10 million.

Meanwhile, strong global demand for Filipino talent from the information technology-BPO and other industries has inspired the group’s entry into the education space through newly formed subsidiary LiveIT Global Services Management Institute (LGSMI).

“LGSMI is seeking to invest in or partner with existing schools or build new schools in both basic education and higher education,” Ayala said in its annual report.

Based on the report, LGSMI’s vision of “education for employability” is to deliver “high quality, affordable education that can significantly enhance the potential for employment of students from the mass market, by equipping them with real-world skills through programs designed in close partnership with prospective employers.”

In the fourth quarter of 2012, LGSMI teamed up with Jose Rizal University and rolled out LGSMI’s “professional employment program,” which trains college seniors through workplace simulations and internships with leading employers, including many of the Ayala companies.

This year, the Ayala group said LiveIT was expecting further growth and improvement in margins as investee companies scale up their businesses.

LiveIT, however, has vowed to be “watchful for the risks associated with a potential slowdown in the US or Europe, or a weakening of the (US) dollar.”

A weakening of the US dollar alongside the appreciation of the peso dilutes the local currency equivalent of earnings generated by BPO companies like LiveIT.