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DCT
DCT
DCT - Datacentrix Holdings - Audited Results For The Financial Year
Ended 29 February 2008
DATACENTRIX HOLDINGS LIMITED
REGISTRATION NUMBER: 1998/006413/06
JSE CODE: DCT
ISIN: ZAE000016051
AUDITED RESULTS FOR THE FINANCIAL YEAR ENDED 29 FEBRUARY 2008
* Key Financial Indicators
* Revenue increased 12% to R1.35 billion
* EBITDA increased 26% to R157.1 million
* Earnings attributable to ordinary shareholders exceeding R100 million
* Basic headline earnings per share (HEPS) increased 29% to 52.0 cents
* Basic earnings per share (EPS) increased 30% to 52.0 cents
* Cash on hand of R221.9 million, with no interest-bearing debt
* Cash generated from operations of R164.2 million
* Final dividend of 15 cents per share, bringing annual dividend to 26 cents
per share
Condensed Consolidated Income Statement for the year ended 29 February 2008
Audited Audited
2008 2007
R`000 R`000
Revenue 1 346 971 1 201 904
Operating profit 146 942 114 433
Net interest received 9 137 9 750
Profit before taxation 156 079 124 183
Income tax expense (54 214) (45 913)
Earnings attributable to ordinary 101 865 78 270
shareholders
Basic earnings per ordinary share 52.0 40.0
(cents)
Diluted basic earnings per ordinary 51.0 39.2
share (cents)
Proposed and declared dividend per 26.0 20.2
share (cents)
Earnings before interest, taxation, 157 096 124 564
depreciation and amortisation (EBITDA)
Headline earnings per ordinary share 52.0 40.4
(cents)
Diluted headline earnings per ordinary 51.0 39.5
share (cents)
Weighted average number of shares in 195 785 195 655
issue* (000`s)
Weighted average number of shares in 199 634 199 635
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 101 865 78 270
shareholders
Goodwill impaired - 661
(Profit) loss on sale of property and (74) 21
equipment
Headline earnings 101 791 78 952
Condensed Consolidated Balance Sheet as
at 29 February 2008
Audited Audited
2008 2007
R`000 R`000
ASSETS
Non-current assets 79 185 65 297
Property and equipment 32 018 30 074
Intangible assets 17 740 16 463
Long-term receivables 6 259 4 178
Deferred tax assets 23 168 14 582
Current assets 469 344 392 048
Inventories 10 976 9 401
Trade and other receivables 236 472 208 806
Cash and cash equivalents 221 896 173 841
TOTAL ASSETS 548 529 457 345
EQUITY AND LIABILITIES
Capital and reserves 294 476 248 468
Share capital 21 21
Share premium 38 145 40 709
Treasury shares (35 901) (25 958)
Equity-settled share scheme reserve 12 672 8 642
Retained earnings 279 539 225 054
Non-current liabilities 19 327 20 334
Obligations under finance leases - 2 007
Deferred revenue 19 327 18 327
Current liabilities 234 726 188 543
Trade and other payables 165 408 133 643
Provisions 17 323 18 485
Deferred revenue 27 205 27 655
Lease liability 215 460
Current tax liabilities 24 575 8 300
TOTAL EQUITY AND LIABILITIES 548 529 457 345
Net asset value (adjusted for treasury 150.4 127.0
shares) per share (cents)
Tangible net asset value (adjusted for 141.4 118.6
treasury shares) per share (cents)
Weighted average number of shares in 195 785 195 655
issue (000`s)
Condensed Consolidated Statement of Changes in Equity for the year ended 29
February 2008
Equity
settled
share
Share Share Treasury scheme Retained
capital premium shares reserve earnings Total
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 28 21 40 311 (20 203) 5 042 219 176 244 347
February 2006
Profit for the - - - - 78 270 78 270
year
Treasury shares - - (5 755) - - (5 755)
movement
Share-based - - - 3 600 - 3 600
payments
Dividend 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
Profit for the - - - - 101 865 101 865
year
Treasury shares - - (9 943) - - (9 943)
movement
Share-based - - - 4 030 - 4 030
payments
Dividend paid - - - - (47 380) (47 380)
Loss on sale of - (2 564) - - - (2 564)
treasury shares in
trust
Balance at 29 21 38 145 (35 901) 12 672 279 539 294 476
February 2008
Condensed Consolidated Cash Flow
Statement for the year ended 29 February
2008
Audited Audited
2008 2007
R`000 R`000
Profit before tax 156 079 124 183
Adjusted for non-cash items 2 164 4 825
Working capital changes 5 927 339
- Inventory (1 575) (4 565)
- Trade and other accounts receivable (25 309) 3 167
- Trade, other accounts payable and 32 811 1 737
liabilities
Cash generated from operations 164 170 129 347
Net interest received 9 137 9 750
Dividend paid (47 380) (72 392)
Taxation paid (46 525) (44 657)
Net cash inflow from operating activities 79 402 22 048
Net cash outflow from investing (19 206) (6 077)
activities
Net cash outflow from financing (12 141) (7 745)
activities
Net increase in cash and cash equivalents 48 055 8 226
Cash and cash equivalents at the 173 841 165 615
beginning of the year
Cash and cash equivalents at the end of 221 896 173 841
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 and
methods of computation, which comply with International Financial Reporting
Standards, have been consistently applied in all material respects in the
current and comparative year. The new standards and interpretations that
were adopted in the current year had no impact on the results of the group.
Auditors` Opinion and Subsequent Events
The group`s auditors, Deloitte & Touche, have audited these results and a
copy of their unmodified audit opinion on this set of summarised financial
information as well as their accompanying unmodified audit report on the
financial statements 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 pleased to announce the
annual financial results of the group for the year ended 29 February 2008.
Growth has been achieved on all the indices normally reported on. There has
been strong operational performance across all group businesses.
Headline earnings per share (HEPS) increased by 29% to 52.0 cents and
earnings per share (EPS) increased 30% to 52.0 cents. Operating performance
(EBITDA) increased by 26% to R157.1 million. Cash generated from operations
was R164.2 million, and the cash on hand increased even after the
declaration and payment of dividends.
The Business of Datacentrix
Datacentrix`s major activities comprise the supply, integration and
optimisation of IT infrastructure, business solutions and related services
to its corporate customer base. It operates throughout South Africa.
Infrastructure and Related Services
This was a positive year for the Infrastructure and Related Services
division, with the Johannesburg office exceeding expectations, as well as
solid performances seen from the coastal regions of Cape Town and Durban.
Several vertical business units, including Outsourcing, Microsoft Software
Services and Security have also performed well. In the year under review
this division produced healthy organic growth contributing R1 280 million
(2007: R1 133 million) and R131 million (2007: R99 million) to the group`s
segment revenue and segment result for the year respectively. The division
continues to be a leading provider for the supply, deployment, maintenance
and support of IT infrastructure solutions.
Datacentrix has strengthened the Services management team with high level
appointments. These appointments will improve operational capacity of the
group to service an increased client footprint and to continue to deliver
the service levels that its clients have become accustomed to.
Managed Print Services has grown tremendously in the past year. Execution
and delivery has improved through the redesign of its core processes and
systems.
The company has formalised a Resourcing Services business unit, focusing on
the provision of selected on-site resources to meet client specifications.
Datacentrix believes this will assist in addressing the high demands placed
on businesses today by the increasing skills shortage within the IT sector.
The Outsourcing business unit focusing on selective outsourcing is now well
established and has had solid growth in the past year. The client base
includes blue chip companies on a national level who have engaged us for the
typical time frame of three years renewable.
In our Related Services business we have enjoyed high levels of customer
satisfaction on Service Level Agreements. The customers` satisfaction levels
are determined by an independent survey conducted annually and focus on
assisting clients at every stage of the selected solution lifecycle -
ranging from needs determination, product evaluation, configuration,
installation and support. The company`s objective is to exceed client
expectations.
We have established a Security business unit, which has already won two
major implementation deals, one of which has been completed. We have also
formalised our Networking business unit addressing two new main areas:
bandwidth optimisation dealing with solutions designed to improve bandwidth
utilisation; and the provisioning of network infrastructure focusing on new
network technologies.
The company continues to ensure that it holds the highest technical vendor
accreditations, ensuring that it remains the most cost effective partner of
choice for the supply, installation and ongoing maintenance of equipment
over its entire lifespan. Datacentrix was awarded a number of prestigious
Vendor partner awards which bears testimony to its market positioning.
Partner awards garnered over the year include HP`s "channel partner of the
year" for both the Imaging and Printing and Technology Solutions groups.
Datacentrix also attained "the highest consistent growth for the Storage
Works Division" award.
Solutions
The Solutions Division has successfully reduced it`s reliance on product
sales and now enjoys higher proportions of its revenues from consulting and
services. The change has shown positive results in that the division has
become more profitable from a services perspective.
The Development and Integration business unit remains focused on workflow
and data-mining, while the Optimisation business unit is now services led
and focusing primarily on the Enterprise Content Management and Information
Life Cycle management space.
Overall the Solutions business has maintained its profitability (segment
result) R16 million (2007: R16 million) and contributed R67 million (2007:
R68 million) to the group`s segment revenue.
Black Economic Empowerment
Datacentrix is currently a level 5 contributor based on the Empowerdex
Rating. With a clearer understanding of the Department of Trade and Industry
Codes of Practice, the company has now embarked on a specific program to
improve its level of contribution status. With respect to equity
participation the intention of the company is that this would include
participation by key employees 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
Gerhard Uys, a co-founder and CEO of the business and a key executive
announced his retirement in December 2007, effective end of February 2008.
The board of Datacentrix wishes to express its thanks and appreciation for
the significant value Gerhard has added to the business over the years, and
also to convey its best wishes. In line with the company`s succession
planning the board appointed Ahmed Mahomed as Chief Executive Officer. Ahmed
was Managing Director of the Infrastructure and Related Services Division,
the largest of the company`s operations before becoming Chief Operations
Officer over a year ago.
At the end of February, Imogen Mkhize, an independent Non-Executive Director
of the company and a member of the Audit and Risk and Remuneration
Committee, also stepped down from the Datacentrix board.
The board is pleased to announce the appointment of Dudu Nyamane as an
independent, Non-Executive Director effective 14 April 2008. Dudu has over
twenty years of experience in the IT Sector and brings significant human
capital management skills and knowledge to the board.
This brings the profile of the board to over 80% black and almost half are
female, the majority of whom are independent non-executive directors.
Prospects
Based on current economic outlook and the company`s market positioning, the
board expects to maintain the overall trend from the last few years.
We expect growth to come principally from the Johannesburg client base as
well as government. Future growth for the company is likely to be
principally organic, although we will look at specific niche acquisitions in
order to procure specific competencies and skills. The company will continue
with its current strategy of growing business with existing clients whilst
looking to increase its client base.
Dividend
A final dividend of 15 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 29 February 2008 to a total of 26 cents.
Declaration date: Monday, 14 April 2008
Last day to trade: Wednesday, 30 April 2008
Share trade ex dividend: Monday, 5 May 2008
Record date: Friday, 9 May 2008
Payment date: Monday, 12 May 2008
Share certificates may not be dematerialised or re-materialised between
Monday, 5 May 2008 and Friday, 9 May 2008, both days inclusive.
Annual General Meeting
It is expected that the Annual Report will be dispatched to shareholders no
later than 14 May 2008. Notice is hereby given that the annual general
meeting of the company will be held at the company`s registered office on 6
June 2008 at 10:00.
For and on behalf of the Board:
Gary Morolo
Chairman
15 April 2008
Directors: Gary Morolo (Chairman), Ahmed Mahomed (CEO), Alwyn Martin*, Dudu
Nyamane*, Elizabeth Naidoo, Israel Skosana*, Joan Joffe*
*non-executive and independent
Company Secretary: Mavis Thomani
Registered Office: Block 7, Sanwood Park, 379 Queens Crescent, Lynnwood,
Pretoria
Transfer Secretaries: Computershare Investor Services (Pty) Ltd, 70
Marshall Street, Johannesburg
Sponsor: Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
Date: 15/04/2008 12:55:01 Produced by the JSE SENS Department.
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