Technology is changing in South Africa, the market is moving forward, forcing IT companies such as ICT solutions provider, Datacentrix (DCT) to adapt accordingly, the company’s CEO explains.<\/p>\n
On Tuesday (17 April 2012) Datacentrix reported a decline in operating profit to R123.45 million for the year ended February 2012, from R124.44 million before.<\/p>\n
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.<\/p>\n
In its earnings report, the company said its results reflected its transformation from a largely single vendor, product transactional business, to one that is a services-led integrator.<\/p>\n
Speaking to Alex Hogg in a Moneyweb podcast, Datacentrix’s CEO, Ahmed Mahomed elaborated on the company’s results, and how the company has shifted its strategy in the past five years.<\/p>\n
Shift in strategy<\/strong><\/p>\n Mohamed explained that there’s been a significant shift in technology over the past few years, where more affordable tech has led companies to find out ways to draw more value from IT departments.<\/p>\n Datacentrix, traditionally a hardware vendor, has in-turn had to adapt to that environment, where simply moving hardware from supplier to customer is no longer as lucrative as it was, previously.<\/p>\n “The traditional infrastructure business was really single-vendor dependent…it\u2019s really more a logistics function in moving products from one end to the other with a couple of services wrapped around it at the very basic level,” Mahomed explained.<\/p>\n “Moving hardware from the supplier to the end user customer…it was very lucrative for us, we\u2019re not apologetic about it, but the market is moving on, IT is a dynamic area and we\u2019re adapting accordingly.”<\/p>\n Datacentrix’s outsourcing and resourcing business units showed double-digit growth in the groups financial results – a segment which the Mahomed cited as “up to 50% of our revenue stream.”<\/p>\n “Essentially we\u2019re providing a total solution to a client, so it\u2019s not just moving hardware components, but providing the end to end solution to a client.”<\/p>\n “That\u2019s what we\u2019ve been doing for the last five years and that\u2019s the reason you see the results, and the 50% change in mix from just a pure hardware business, to a more service-orientated organisation.”<\/p>\n Looking ahead<\/strong><\/p>\n Moving forward, Mahomed said that the company would continue to focus on the transformation to a service-orientated business.<\/p>\n On Wednesday (11 April 2012) the company announced that it had signed a three-year R9 million outsourcing deal with leading black-empowered coal mining company, Shanduka Coal.<\/p>\n Datacentrix will provide the majority of IT support services to Shanduka Coal\u2019s offices in Mpumalanga, KwaZulu-Natal and Gauteng – in-line with the CEO’s stated focus.<\/p>\n “That strategy is on the way.”<\/p>\n Datacentrix’s share price showed no change on the JSE at time of publishing, trading at a solid R5.00.<\/p>\n Related articles<\/strong><\/p>\n