Datacentrix sees profit decline

JSE-listed ICT solutions provider, Datacentrix (DCT) has on Tuesday (April 17, 2012) reported a decline in operating profit to R123.45 million for the year ended February 2012, from R124.44 million before.

However, the company’s revenue increased by 11.6% to R1.758 billion, in light of the windfall earnings flowing from the once-off FIFA World Cup event in the previous financial year.

Basic earnings per share increased by 0.7% to 46.4 cents and headline earnings per share increased by 1.3% to 46.9 cents.

Datacentrix said its results reflected its transformation from a largely single vendor, product and transactional business to one that is a best-of-breed solutions and services-led integrator.

It noted that Government’s continued lack of IT expenditure has further impacted performance.

Profit after tax (PAT) showed a nominal increase at R90.844 million for the period, due to a decline in EBITDA margins from 9.5% to 8.3% it said.

The Business Solutions division grew divisional PAT by 12%, supported by good performances in the Enterprise Content Management (“ECM”) and the Business Intelligence (“BI”) sectors.

Datacentrix’s Managed Services division had an expected performance decline in the Managed Print Services (MPS) business, following windfall revenues in the previous year from the World Cup, the group said.

The outsourcing business unit, however, showed healthy double-digit growth for the financial year. Services provided by the unit range from selective outsourcing to total outsourcing.

“It is envisaged that further investments will be made to enhance the unit’s capability, which will drive efficiencies and have a positive impact on service delivery,” Datacentrix said.

The group’s resourcing business also showed double digit growth for the year contributing further to the revenue diversification strategy.

Looking ahead, Datacentrix said that market consolidation will continue, attested to by the recent numerous acquisitions by HP and IBM. “Consolidation has been driven principally by one or two listed companies.”

BMI Research forecasts the South African ICT industry to reach around R75 billion over 2012. However, Datacentrix noted that South African businesses are expected to remain cautious when it comes to investments in technology, due to continued global economic uncertainty.

The local IT market’s five-year compound annual growth rate (CAGR) is anticipated to remain within the high single- and low double- digit range.

“Datacentrix’ transition to a services-led solutions provider is set to continue over the next year,” it said.

Datacentrix added that, as cloud technology matures, the group will continue to make the necessary investment in both “white label” cloud solutions and building its own cloud infrastructure.

“The IT landscape is highly competitive from a skills perspective due to scarcity. Datacentrix has set up a learnership programme aimed at school leavers and those with basic IT qualifications.”

“The group is also seeking out unemployed graduates, with the relevant qualifications to provide permanent employment and to develop specialised skills,” it concluded.

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Datacentrix sees profit decline