Datacentrix eyes Africa growth
Integrated ICT systems provider, Datacentrix reported an increase in revenue of 11.3% to R1.23 billion, for the period ended 31 August 2015.
Earnings attributable to shareholders grew by 15.4% to R54.5 million and headline earnings per share (HEPS) increased by 14% from 24.3 cents to 27.7 cents.
“Datacentrix achieved both revenue and earnings growth for the reporting period and was cash generative with a healthy cash balance,” said Group CEO, Ahmed Mahomed.
Working capital was well managed, resulting in cash generated from operations of R107 million, converting 196% of earnings into cash.
“Datacentrix has performed well and we remain positive about the long-term prospects of the group, as the key drivers of IT remain robust. This combined with our financial and market position will drive growth. Furthermore, the group is in a healthy cash position, which will enable us to pursue suitable acquisitions,” Mahomed said.
Looking ahead, Mahomed states that the group is encouraged by opportunities in Africa and its strategy is to follow customers further north into the continent.
The group is currently engaging in opportunities across these areas.
Mahomed said that the acquisition of Infrasol will complement the group’s existing capabilities and contribute to driving economies of scale within the Managed Services division.
“Synergies, including integration into Datacentrix’ premises, financial, logistical and operational systems are being leveraged. The combined capabilities of these entities will drive growth and, at this early stage, have resulted in the Group securing new business.”
Of its three divisions, Managed Services contributed 35% to the Group’s earnings, with Technology responsible for 46%, and Business Solutions 10%.
The Managed Services division grew revenue by 9.5% and earnings by 18% for the reporting period. Operating margin was maintained at 9.4%.
The Internet and network service provider and communications business, eNetworks performed well; and in particular the division’s Managed Talent Solutions and Managed Print and Document Solutions businesses produced good growth.
Revenue within the Technology division grew by 14%, with good revenue growth achieved specifically within the datacentre, storage, security, and networking areas.
Earnings grew by 6.4%, with an operating margin of 4.1%.
The Business Solutions division achieved an operating margin of 10.3% and contributed 10% to total earnings for the period. Good growth was achieved within the Enterprise Information Management (EIM) business.
During the last reporting period, the group noted that it had secured new multi-year contracts outside of the renewal contracts. Revenue realised from these new contracts was limited over the reporting period with the bulk expected to flow in the next 12 months.
The board has declared a gross cash dividend of 9.23 cents per share.
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