The ongoing consolidation trend has made the IT sector one of the hottest on the Tel Aviv Stock Exchange in recent months. Organic growth by IT companies winning tenders to provide IT services, however, is also an important factor. One such tender, recently won by Malam Team Ltd. (TASE: MLTM), was conducted by the Ministry of Finance Accountant General department.
As far as is known, Malam Team was selected in this tender, to create the future payroll system for state employees in all government ministries, ahead of Hilan. The tender results were published in September, when the Ministry of Finance announced that Malam Team subsidiary Malam Payroll had contracted a ten-year agreement with the government that included a ten-year option. The financial details of the project were not disclosed, but sources inform "Globes" that it is worth tens of millions of shekels.
The company will provide the government with all of the necessary services for setting up, operating and maintaining the future payroll system, which will be built on the basis of Merkava, the government enterprise resource planning system. Malam Team will produce the pay slips for 90,000 state employees. Upon publication of the tender results, Accountant General Rony Hizkiyahu said that the tender would save the government tens of millions of shekels a year.
After his company won the tender, Malam Payroll CEO Uri Salah said, "I'm proud that the Ministry of Finance has entrusted Malam Payroll with establishing and operating a future payroll system for the state's employees. For some 60 years now, Malam Payroll has been a public sector payroll generator for professional state employees with responsibility and great dedication, and we are glad to continue providing this service for many more years."
Malam Team, controlled by Shlomo Eisenberg, has a NIS 1.4 billion market cap, following a 97% climb in its share price since the beginning of 2019. The company is active in four sectors: infrastructure (hardware); software and projects; outsourcing; and payroll services, human resources, and long-term savings.
Malam Team's revenue from payroll services grew 11.3% to NIS 148 million in the first nine months of 2019. While the company's business in this sector is smaller than in its other sectors, it is more profitable for the company, with a 23.9% operating profit margin this year (a NIS 35.4 million profit from regular activity), compared with the company's 7.6% overall profit margin.
Published by Globes, Israel business news - en.globes.co.il - on November 25, 2019
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