| Tue 17 Apr 2007, 12:52 | | DCT - Datacentrix - Audited Results For The Financ |
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DCT
DCT
DCT - Datacentrix - Audited Results For The Financial Year Ended 28 February
2007 and dividend declaration
DATACENTRIX HOLDINGS LIMITED
REGISTRATION NUMBER: 1998/006413/06
JSE CODE: DCT
ISIN: ZAE000016051
AUDITED RESULTS FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2007
- Key Financial Indicators
- Revenue increased 16% to R1.2 billion
- EBITDA increased 40% to R124.6 million
- Headline earnings per share (HEPS) increased 41% to 40.4 cents
- Earnings per share (EPS) increased 57% to 40 cents
- Cash on hand of R174 million, with no interest-bearing debt
- Cash generated from operations of R129 million
- Final dividend declared of 13.2 cents per share, bringing annual dividend
to 20.2 cents
Condensed Consolidated Income Statement for the year ended 28 February 2007
Audited Audited
2007 2006
R`000 R`000
Revenue 1 201 904 1 034 397
Operating profit 114 433 70 430
Net interest received 9 750 7 856
Profit before taxation 124 183 78 286
Income tax expense (45 913) (28 341)
Earnings attributable to ordinary 78 270 49 945
shareholders
Basic earnings per ordinary share 40.0 25.5
(cents)
Diluted basic earnings per 39.2 24.9
ordinary share (cents)
Dividend per share (cents) 20.2 14.0
Special dividend per share (cents) - 16.0
Earnings before interest, 124 564 88 661
taxation, depreciation and
amortisation (EBITDA)
Headline earnings per ordinary 40.4 28.7
share (cents)
Diluted headline earnings per 39.5 27.9
ordinary share (cents)
Weighted average number of shares 195 655 195 647
in issue* (000`s)
Weighted average number of shares 199 635 200 713
in issue for the purpose of
dilution* (000`s)
*adjusted for treasury shares
Reconciliation between earnings
attributable to ordinary
shareholders
and headline earnings
Earnings attributable to ordinary 78 270 49 945
shareholders
Goodwill impaired 661 7 857
Condensed Consolidated Balance Sheet as
at 28 February 2007
Audited Audited
2007 2006
R`000 R`000
ASSETS
Non-current assets 65 297 68 194
Property and equipment 30 074 31 217
Intangible assets 16 463 17 008
Long-term receivables 4 178 7 230
Deferred tax assets 14 582 12 739
Current assets 392 048 381 947
Inventories 9 401 4 836
Trade and other receivables 208 806 211 496
Cash and cash equivalents 173 841 165 615
TOTAL ASSETS 457 345 450 141
EQUITY AND LIABILITIES
Capital and reserves 248 468 244 347
Share capital 21 21
Share premium 40 709 40 311
Treasury shares (25 958) (20 203)
Equity-settled share scheme reserve 8 642 5 042
Retained earnings 225 054 219 176
Non-current liabilities 20 334 19 746
Obligations under finance leases 2 007 4 205
Deferred revenue 18 327 15 541
Current liabilities 188 543 186 048
Trade and other payables 133 643 136 423
Provisions 18 485 26 611
Deferred revenue 27 655 17 590
Lease liability 460 300
Current tax liabilities 8 300 5 124
TOTAL EQUITY AND LIABILITIES 457 345 450 141
Net asset value (adjusted for treasury 127.0 124.9
shares) per share (cents)
Tangible net asset value (adjusted for 118.6 116.2
treasury shares) per share (cents)
Weighted average number of shares in 195 655 195 647
issue (000`s)
Profit on disposal of business - (74)
Loss (profit) on sale of property and 21 (1 671)
equipment
Headline earnings 78 952 56 057
Condensed Consolidated Statement of Changes in Equity for the year ended 28
February 2007
Share Share Treasury Equity Retained Total
capital premium shares settled earnings R`000
R`000 R`000 R`000 share R`000
scheme
reserve
R`000
Balance at 28 20 39 589 (14 060) 1 735 186 866 214 150
February 2005
Net profit for - - - - 49 945 49 945
the year
Treasury shares - - (6 143) - - (6 143)
movement
Share issue - (10) - - - (10)
expenses
Raised on new 1 912 - - - 913
acquisitions
Share-based - - - 3 307 - 3 307
payments
Dividend paid - - - - (17 635) (17 635)
Loss on sale of - (180) - - - (180)
treasury shares
in trust
Balance at 28 21 40 311 (20 203) 5 042 219 176 244 347
February 2006
Net profit for - - - - 78 270 78 270
the year
Treasury shares - - (5 755) - - (5 755)
movement
Share-based - - - 3 600 - 3 600
payments
Dividends paid - - - - (72 392) (72 392)
Profit on sale of - 398 - - - 398
treasury shares
in trust
Balance at 28 21 40 709 (25 958) 8 642 225 054 248 468
February 2007
Condensed Consolidated Cash Flow
Statement for the year ended 28
February 2007
Audited Audited
2007 2006
R`000 R`000
Profit before tax 124 183 78 286
Adjusted for non-cash items 4 825 11 894
Working capital changes 339 (37 678)
- Inventory (4 565) 2 031
- Trade and other accounts 3 167 (88 545)
receivable
- Trade, other accounts payable 1 737 48 836
and liabilities
Cash generated from operations 129 347 52 502
Net interest received 9 750 7 856
Dividend paid (72 392) (17 635)
Taxation paid (44 657) (30 492)
Net cash inflow from operating 22 048 12 231
activities
Net cash outflow from investing (6 077) (13 797)
activities
Net cash (outflow) inflow from (7 745) 35
financing activities
Net increase (decrease) in cash 8 226 (1 531)
and cash equivalents
Cash and cash equivalents at the 165 615 167 146
beginning of the year
Cash and cash equivalents at the 173 841 165 615
end of the year
Basis of Preparation
The condensed financial statements of the group are prepared as a going concern
on a historical cost basis except for certain financial instruments, at
amortised cost or fair value. The summarised annual financial statements
conform to International Accounting Standard 34: Interim Financial Reporting,
the Listing Requirements of the JSE Limited and the Companies Act of South
Africa (Act 61 of 1973). The principal accounting policies, which comply with
International Financial Reporting Standards, have been consistently applied in
all material respects in the current and comparative period.
Auditors` Opinion and Subsequent Events
The group`s auditors, Deloitte & Touche, have audited these results and a copy
of their unmodified audit opinion as well as their accompanying unmodified audit
report on this set of summarised financial information is available for
inspection at the company`s registered office. No material events have occurred
between the financial year end and the date of the audit report.
Commentary
The directors of Datacentrix Holdings Limited are proud to announce the annual
financial results of the group for the year ended 28 February 2007. Growth has
been achieved on all the indices as normally reported on. There has been strong
operational performance across all group businesses.
Headline earnings per share (HEPS) increased by 41% to 40.4 cents and earnings
per share (EPS) increased 57% to 40 cents. Operating performance (EBITDA)
increased by 40% to R124.6 million. Cash generated from operations was R129
million, and the cash on hand increased despite the declaration and payment of
normal and special dividends.
Infrastructure and Related Services
The Infrastructure and Related Services division produced significant growth,
resulting in the division concluding the financial year with healthy organic
growth. This division contributed R1.1 billion (2006: R960 million) and R99
million (2006: R67 million) to the group`s revenue and segment result for the
year respectively. We continue to be a dominant player in the supply,
deployment, maintenance and support of IT infrastructure solutions to enterprise
South Africa. In the period under review we had a number of significant wins
including sizable transactions in the selective outsourcing and managed output
solutions. We have retained all our major clients, renewed existing contracts
and strengthened our technology partner accreditations. The division`s strategic
focus remains unchanged.
The division experienced strong performance from all segments of the market.
Growth areas have included managed output solutions, enterprise systems,
selective outsourcing and government infrastructure. We continue to ensure that
the group is accredited by its vendors at the highest possible level both in the
technical and sales arenas. This competency ensures Datacentrix is a cost
effective partner for the supply, installation and maintenance of equipment over
its entire life-cycle.
Client satisfaction remains extremely important. Datacentrix` full service focus
on the supply and support of hardware ensures ease of engagement. Clients are
assisted through various processes including the needs determination, the
product evaluation and selection, the configuration and installation and the
support of the infrastructure thereafter. Datacentrix has cemented its position
in the selective outsourcing market with successful implementations, and we are
confident that we will find a more receptive market for our innovative approach.
Solutions
The Enterprise Resource Planning business unit has overcome the challenges
encountered during the previous year and returned to stronger financial
performance. Improved contract and project management and implementation
methodologies have been employed successfully. Client relationships have been
strengthened and service delivery enhanced. Management is confident that these
turnaround activities have improved the efficiencies of the business and look
forward to future contributions by the business unit to the growth in earnings.
Datacentrix remains a Microsoft Gold Partner.
The Workflow and Development business unit has won major projects in the areas
of workflow, business intelligence and data-mining during the year. The
Optimisation business unit serving the electronic content management and
archiving areas has also performed creditably.
Overall the Solutions business has improved its profitability (segment result)
to R16 million (2006: R2 million) and contributed R68 million (2006: R75
million) to the group`s revenue.
Black Economic Empowerment (BEE)
Datacentrix has maintained its Empowerdex "A" Rating. With the Department of
Trade and Industry Codes of Practice largely in place, clarity has been provided
for companies to begin to purposefully address their empowerment credentials.
Datacentrix will be taking this opportunity to further enhance its credentials
in each of the various aspects of the codes. The intention of the group is that
this would include focus on equity participation for senior black staff and
management whose contribution to the current and future success of the business
is essential. Datacentrix is busy evaluating a number of options to address this
issue.
Board and Management changes
Klaas Lammers, a co-founder of the business and a key executive announced his
retirement in November 2006, effective end of February 2007. The board of
Datacentrix wishes to express its thanks and appreciation for the value Klaas
has added to the business over the years, and also to convey its best wishes.
The company took this opportunity to streamline its management structure and to
do succession planning. Ahmed Mahomed has been appointed group Chief Operations
Officer. At the same time as the aforementioned changes, Charl Joubert, an
Executive Director of the company and Managing Director of the Solutions
Division, stepped down from the Datacentrix board to focus on rebuilding a
division that had experienced significant operational and profitability set-
backs. The board is pleased to note that this intensified focus has paid off and
that the division has been restored to profitability and operational issues have
been substantially addressed.
Israel Skosana was appointed in November 2006 as an independent, non-executive
director. This brings the profile of the board to 67% black and 33% female. The
board now comprises nine directors, the majority of whom are non-executive. Four
of these are also independent.
Prospects
Based on current economic outlook and the company`s market positioning, the
board is positive about the prospects of the company. Datacentrix continues to
be a well-placed partner to government, specifically on the existing SITA
contracts. Government spending on IT has increased markedly and we expect to see
ongoing activity from this sector.
These indicators are also true for the commercial sector of the market with
increased demand for mobile security and storage solutions. The release of
Microsoft`s latest products will give further impetus to IT infrastructure
investment.
The anticipated large infrastructure roll-outs including rail and ports,
electricity and the hosting of the 2010 World Cup will contribute to a positive
economic climate with encouraging spin-offs for the IT sector. The pressure to
make broadband more accessible and affordable to stimulate economic growth and
to make South Africa viable as a call centre destination also adds to an
optimistic outlook for the IT industry. The demand for Infrastructure and
related services continues to generate growth to the group`s earnings. The
Solutions Division is being put on a sound footing and there are expectations
that it will return to being a significant contributor to the bottom line.
Datacentrix is well positioned to capitalise on the opportunities outlined
above.
Dividend
A final dividend of 13.2 cents has been declared in line with our dividend
policy of two times cover on HEPS. This brings the dividend declared for the
financial year ended 28 February 2007 to a total of 20.2 cents.
Declaration date: Monday, 16 April 2007
Last day to trade: Friday, 4 May 2007
Share trade ex dividend: Monday, 7 May 2007
Record date: Friday, 11 May 2007
Payment date: Monday, 14 May 2007
Share certificates may not be dematerialised or rematerialised between 7 May
2007 and 11 May 2007, both days inclusive.
Annual General Meeting
It is expected that the Annual Report will be dispatched to shareholders no
later than 16 May 2007. Notice is hereby given that the annual general meeting
of the company will be held at the company`s registered office on 8 June 2007 at
10h00.
For and on behalf of the Board:
Gary Morolo
Chairman
17 April 2007
Directors: Gary Morolo (Chairman), Gerhard Uys (CEO), Ahmed Mahomed (COO),
Alwyn Martin*, Elizabeth Naidoo, Imogen Mkhize*, Israel Skosana*, Joan Joffe*,
Stewart Barker
*non-executive and independent
Company Secretary: Johan Landsberg
Registered Office: Block 7, Sanwood Park, 379 Queens Crescent, Lynnwood,
Pretoria
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Ltd, 70
Marshall Street, Johannesburg
Sponsor: Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
Date: 17/04/2007 12:52:46 Produced by the JSE SENS Department.
