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DIDDT
DDT - Dimension Data Holdings Plc - Unaudited Interim Results Six months ended
31 March 2008
Dimension Data Holdings Plc
("Dimension Data")
(Incorporated in the United Kingdom)
(Registration number 3704278)
Issuer code: DIDDT
JSE Share Code: DDT
ISIN Code: GB0008435405
Dimension Data Holdings plc
Unaudited Interim Results
Six months ended 31 March 2008
Dimension Data Holdings plc (`Dimension Data` or the `Group`) today announced
its results for the six months ended 31 March 2008. The results have been
prepared in accordance with International Financial Reporting Standards, as
adopted by the European Union.
Highlights
Revenue up by 22.7% to $2.2 billion (Product up 22.6%, Services up 22.7%)
Constant currency revenue (2) up by 16.3% (Product up 15.4%, Services up
17.8%)
Growth and margin expansion in all Regions
Supported by Network Integration up 16.6% (2), Security up 35.6% (2) and
Converged Communications up 20.9% (2)
Gross margin increased to 21.3% (H1 2007: 20.9%)
Operating profit (1) up 54.5% to $85.0 million
Operating margin (1) increased to 3.9% (H1 2007: 3.1%)
Earnings per share (1) increased 41.7% to 3.4 cents (H1 2007: 2.4 cents)
Financial Summary
Six months ended Six months ended
$`000 31 March 2008 31 March 2007
Revenue 2,171,212 1,770,140
Operating profit 85,016 48,425
Margin 3.9% 2.7%
Operating profit (before exceptional items) 85,016 55,032
Margin (before exceptional items) 3.9% 3.1%
Profit attributable to equity
shareholders of the parent 55,881 32,613
Profit attributable to equity
shareholders of the parent
(before exceptional items) 52,190 36,647
Earnings per ordinary share (US cents) 3.7 2.1
Earnings per ordinary share (before
exceptional items)
(US cents) 3.4 2.4
Notes:
(1) Before exceptional items. See reconciliation in Note 3 to the condensed
financial statements.
(2) Before eliminating intercompany revenue and adjusted for the impact of
currency movements and the disposal of the Group`s Swedish operations in the
prior year.
Chief Executive Officer`s Review
A SOLID PERFORMANCE
During the first half of FY08, Dimension Data delivered an excellent financial
performance. Revenue increased 23%. Operating profit (1) increased 55% to
$85 million, resulting in an operating margin (1) improvement from 3.1% to 3.9%
driven by improved gross margins and operating leverage.
We drive growth in three ways across the Group - through our regions, lines of
business, and services and during the period achieved a successful performance
in all three. All regions performed well with revenue growth and improved
operating margins (1) in all cases. We experienced double digit growth across
all our lines of business with substantial market share gains in Network
Integration and Security with Services growth at 23%.
While we are driving for growth, it is imperative that we continue to invest
for the longer term to be able to offer an excellent client experience and
deliver operational excellence. Notwithstanding our increased levels of
investment in these areas, we report further operational leverage reflected in
a decline in overheads as a percentage of revenue to 17.4% from 17.8%. This
improvement flows from disciplined cost management, continued productivity
improvements and the benefits of increasing scale.
At the core of this performance are our outstanding people whose commitment to
delivering an outstanding result for our clients continues to be the basis of
our success in the market.
A CHANGING MARKET ENVIRONMENT
Our success in the first half FY08 has played out against a backdrop of
uncertain economic conditions in global markets. Despite some of the
geographies and industry sectors in which we operate feeling the effects of the
credit market related downturn, demand for the Group`s solutions and services
has remained strong. We continue to monitor current market conditions and
remain optimistic for our medium term prospects, as many of our lines of
business and services are intended to improve the cost efficiency,
effectiveness and performance of our clients` IT infrastructure.
CIOs and IT directors are at present focused on several key drivers. They are
looking to drive cost efficiencies through leveraging their existing
investments. They are seeking greater effectiveness through consolidation,
standardisation and virtualisation of their infrastructures. They are focused
on the need to refresh outdated IT infrastructure and on keeping existing
operations secure and at the required state of performance. They are ensuring
that any new IT investments are "future ready" to support emerging
technologies. An important priority for them is the consideration of new
sourcing strategies for support services, managed services adoption and
multisourcing. They are being particularly cautious in the current macro-
economic climate.
Many of the solutions that Dimension Data offers help our clients achieve cost
efficiencies and improve the effectiveness and performance of their existing
infrastructures. For example, our Network Integration solutions build and
refresh the core communications infrastructure that has become the platform for
all business transactions and communications and must perform optimally, 24 x 7
year round. In addition, requirements for our clients to refresh existing
network infrastructure that is end of life or end of support is driving growth.
Our Data Centre and Storage solutions save costs through consolidating server
sprawl while reducing energy consumption and improving application performance.
With security attacks on corporate networks increasing, our Security solutions
continue to be compelling. We are seeing increased interest in Converged
Communications solutions and the deployment of IP Telephony is now mainstream.
Demand for visual communications solutions such as telepresence and
videoconferencing is growing as the technology matures, and clients look to
enhance the effectiveness of their employees whilst reducing the costs and
carbon emissions associated with air travel.
During uncertain economic times, clients look for more flexibility in their IT
service and delivery options. Clients are weighing up the cost value
relationship of supporting and managing their IT infrastructures in house
versus outsourcing elements of that infrastructure. These trends are generating
increased interest in Dimension Data`s portfolio of IT services.
Dimension Data`s solutions and services are well-positioned to continue growing
in a market that is focused on cost effectiveness and the efficiency of IT
infrastructures. While it is difficult to estimate the duration or magnitude
of the current downturn, we believe our offerings to be highly relevant and
aligned to our clients` immediate needs.
CLIENTS AND MARKET SEGMENTS
Our growth has been driven from a number of market segments.
Telecommunications service providers around the world continue to build-out
their revenue generating networks. This is particularly true for geographies
like emerging Africa, Europe and Asia. We have seen robust public sector
investment in a variety of IT projects including core network infrastructure,
IT security, video surveillance and network performance optimisation. We have
experienced solid growth in the commercial or mid-sized business sector. We
have also experienced good growth in revenues with a number of key global
financial institutions where our global procurement and logistics services
provide differentiation. However, against this backdrop of broader growth, we
have seen the rate of growth in some financial services clients slow, as they
become more cautious. Dimension Data`s presence amongst the largest global
corporations has grown to include 74% of the Fortune 100 and 60% of the Fortune
500 companies.
OUR EMPLOYEES CREATE OUR SUCCESS
This year marks the fourth consecutive increase in our employee satisfaction
scores, suggesting a highly engaged and motivated employee base. We will
continue to invest in our employees, their skills, personal growth, and
careers, and in improving the employee experience at Dimension Data, as this is
critical to our success in the market. The value of our solutions and services
is realised through the daily delivery and execution by our 10,600 employees.
Our employees bring the Dimension Data client experience to life. We continue
to develop our 400 key leaders around the globe through the Group`s Leadership
Forum programme. The Leadership Forum offers participants the ability to build
their leadership skills through practical experiences and knowledge sharing
opportunities with the Group Executive. The Group manages a variety of graduate
recruitment and training programmes focused on developing the skills of more
junior technical employees. We formalised an employee mobility programme to
support the knowledge transfer of employees from one region to another region
within the Group. This programme also supports an employee`s personal
development and growth by offering a work abroad opportunity for our current
and future leaders.
ACKNOWLEDGEMENT FROM INDUSTRY LEADERS
Dimension Data`s partnerships with leading IT manufacturers continue to play a
key role in the execution of our strategy. Our understanding of how to make
technology work in operational client environments differentiates us in the
market place. This involves identifying the IT manufacturers that will lead
their industry sectors and then investing in building the technical skills and
expertise so that Dimension Data can offer a superior solution. Being
recognised as the best by our IT manufacturing partners is important because it
reflects consistent positive feedback that they receive from their clients
about our performance. In the first half of FY08 Dimension Data received a
record 20 awards from Cisco. In addition, we received several other awards from
key partners including McAfee, RSA and Nortel. These awards are testament to
our ability to partner well for the benefit of our clients.
MOVING FORWARD
Dimension Data`s strategy remains clear and consistent. The markets we target
provide attractive opportunities for growth. The focus of our growth remains
primarily organic. In high growth markets, where we believe a direct presence
is warranted, we will acquire or partner with local, like-minded companies. We
will continue to grow our six global lines of business and attach services to
all related technology sales. Growing our Services revenues remains a priority.
Investment in developing our services platform, architecture and expanding our
service delivery capabilities is vital and on-going. The further expansion of
our Managed Services capabilities to allow us to secure more multisourcing
opportunities remains important.
The Group`s growth into new markets including emerging Africa, the Middle East,
Canada and Mexico has been successful to date. After a slow start in Brazil,
we are optimistic about our prospects. Our existing geographical footprint
differentiates us and provides strong balance and exciting growth
opportunities. We will continue to invest in expanding our capabilities and
presence in selected geographies.
Deregulation of the telecommunications markets in general, and across Africa
specifically, represents an area of significant opportunity to Dimension Data
in two key ways. Through Dimension Data and Plessey we offer telecommunications
service providers a unique combination of capabilities to assist them with
building and managing their revenue generating networks. Through Internet
Solutions, we are a telecommunications service provider in our own right.
From the implementation of basic IP telephony solutions to real-time
collaboration, we see the emerging unified communications market as highly
attractive. Our historical areas of expertise in IT infrastructure including
networking, IP telephony and IT services, coupled with our growing strengths in
Microsoft technologies, makes the unified communications market ideally suited
to us. As the market opportunity materialises over the next few years we are
well positioned to succeed.
We believe environmentally friendly IT solutions will increasingly be a
priority for our clients around the world as they target lower carbon
emissions and energy consumption from their IT infrastructure. We are actively
developing solutions like our recently launched power and cooling assessment
service and expanding our offerings in visual communications to help our
clients understand and reduce their power consumption and travel and, hence,
reduce their carbon emissions.
OUTLOOK
Building on our strong progress in H1, the key drivers for our business growth
are in place. Whilst recognising the recent turmoil in financial services, we
are optimistic about the remainder of the financial year. We believe the
economic slowdown in several major markets is having some impact on IT
spending. However, Dimension Data is in a strong strategic and operational
position, with the benefit of a robust balance sheet. Our strategy remains
clear and unchanged and we continuously review our operational plans in order
to be able to adapt to developing circumstances. We continue to see solid
demand in the market for our industry relevant solutions and service offerings
and remain confident that the Group is well positioned to drive continued
profitable growth.
Chief Financial Officer`s Review
To review the underlying performance of the business, the following adjustments
have been made below:
Growth rates, unless otherwise indicated, are in relation to H1 2007, are
calculated before eliminating intercompany revenue and adjusted for
the impact of currency movements and the disposal of the Group`s Swedish
operations in the prior year.
Unless specifically indicated, exceptional items are excluded from the
analysis.
Income Statement Summary
Revenue for the six months to 31 March 2008 was $2,171 million, an increase of
16.3% over the prior period. Revenues from the Americas, Asia and Middle East &
Africa were particularly strong, and Services grew by 17.8%. All of the Group`s
global lines of business contributed well, with Network Integration`s increase
of 16.6% continuing to outperform broader market growth.
Gross profit for the period was $462.2 million, up 19.2%, reflecting a 0.5%
improvement in gross margin to 21.3%. Product and Services margins were both
firmer, while an improved Services to Product mix also contributed.
Overheads were contained in relation to revenue growth, increasing by 14.5% to
$377.2 million. Of this, variable overheads (including bonuses and sales
commission) were up by 19.3% to $58.9 million while fixed overheads grew by
13.6% to $318.3 million.
Operating profit was strongly up on the prior period to $85.0 million - a year
on year increase of 46.0% - and operating margin improved from 3.1% to 3.9%.
The share of results from associates increased to $3.8 million from $3.1
million, while net interest costs reduced to $7.4 million.
Property revaluation and other gains and losses include a gain on revaluation
of the investment portion of the Campus property asset of $3.6 million (H1
2007: $13.6 million).
The Group tax charge was $22.9 million, an effective tax rate on profit before
tax of 26.6% (2007: 28.6%). This improvement was mainly the result of improved
profitability from those jurisdictions within the Group which are not currently
paying tax.
Earnings per share were 3.4 cents per share, an increase of 41.7%.
The only exceptional item reported during the period was a $3.7 million gain on
disposal of Automate, a software development company providing solutions to the
automotive industry, to Britehouse, a Group associate.
Trading and Operations
The revenue and gross margin in the tables below are as reported, whereas the
growth rates are calculated before eliminating intercompany revenue and
adjusted for the impact of currency movements and the disposal of the
Group`s Swedish operations in the prior year.
H1 2008
$`000 Growth
Lines of business
Network Integration 1,012,417 16.6%
Global lines of business 715,535 21.6%
Regional 443,260 10.0%
Total 2,171,212 16.3%
H1 2008
$`000 Growth
Revenue streams
Product 1,318,159 15.4%
Managed Services 512,995 18.4%
Professional Services 340,058 17.0%
Total 2,171,212 16.3%
Regional performance
Americas Asia Australia Europe
$`000
H1 2008
Revenue 346,560 353,787 440,803 564,581
Growth % 24.2 29.8 6.8 11.6
Product 272,652 225,730 324,887 351,166
Growth % 27.9 29.0 1.5 9.6
Services 73,908 128,057 115,916 213,415
Growth % 12.4 31.3 28.8 15.1
Gross margin % 15.7 18.5 19.0 20.5
Operating profit 8,431 23,481 19,164 8,109
Operating margin
% 2.4 6.6 4.3 1.4
Restated **
H1 2007
Revenue 277,977 272,513 358,903 470,046
Product 212,131 174,995 279,233 299,016
Services 65,846 97,518 79,670 171,030
Gross margin % 15.9 18.9 18.3 20.5
Operating profit 5,524 16,606 13,059 4,284
Operating margin
% 2.0 6.1 3.6 0.9
Middle
East & Central &
Africa Other * Total
$`000
H1 2008
Revenue 456,297 9,184 2,171,212
Growth % 19.9 16.3
Product 139,483 4,241 1,318,159
Growth % 33.0 15.4
Services 316,814 4,943 853,053
Growth % 14.9 17.8
Gross margin % 28.2 21.3
Operating profit 40,432 (14,601) 85,016
Operating margin
% 8.9 3.9
Restated **
H1 2007
Revenue 379,764 10,937 1,770,140
Product 106,751 3,048 1,075,174
Services 273,013 7,889 694,966
Gross margin % 27.1 20.9
Operating profit 30,679 (15,120) 55,032
Operating margin
% 8.1 3.1
* Includes Central management costs, net of Central trading and Campus income.
** Restated for the reallocation of the Campus from `Middle East and Africa` to
`Central and Other` and the reallocation of certain African revenues from
Product to Services.
Regions
The Americas region, which incorporates our operations in the US, Canada,
Mexico and Brazil, grew revenues by 24.2% and operating profit expanded by
49.7% to $8.4 million. This growth reflects very strong performances in
Security, Data Centre and Storage (DCS) and particularly in Network Integration
where our focus on the network refresh opportunity with our clients compensated
for a more difficult economic environment. Growth was particularly solid within
our multinational client base. Good contributions were reported by Canada and
Mexico, although Brazil disappointed. Gross margins were stable, with a much
better performance in the period from Professional Services.
The Group`s Asian subsidiary, Datacraft had a very strong half, with revenues
up by 29.8%. Growth was robust in both Product and Services, although gross
margin declined by 0.4% as a result of pressures on Managed Services costs. By
geography, growth was attributable to strong performances from India, New
Zealand, Asean and Greater China, offset by a weaker performance from Korea.
Overhead growth was contained and operating profit expanded by 41.4% to
$23.5 million.
In Australia, revenues grew by 6.8% with operating profit up by 26.9% to $19.2
million. Product revenues, particularly in Express Data where growth was flat,
were impacted by a stronger Australian dollar and by reduced spend from some of
our clients. Our Network Integration business had an excellent half. Managed
Services grew by 22.3% on the back of contract wins and Professional Services
were up by 30.8% at improved margins, reflecting solid demand as well as
successful efforts to improve delivery efficiencies and processes. Overhead
containment ensured an improvement in the operating margin to 4.3% from 3.6% in
H1 2007. We acquired the remaining minority interest in SQL Services, a Group
subsidiary providing Microsoft - related solutions.
Europe recorded revenue growth of 11.6% and gross margin improved slightly to
20.5%, a good result in an environment of ongoing industry consolidation,
currency strength and some weakness in the financial services sector. Overhead
growth was 10.5% and as a result operating profit expanded from $4.3 million in
the prior period to $8.1 million. The Security, Converged Communications, DCS
and Customer Interactive Solutions (CIS) lines of business all performed very
strongly. Services revenues were up by 15.1%, reflecting growth in both Managed
and Professional Services. While Managed Services margins declined in the face
of pricing pressure and increased costs, Professional Services margins improved
significantly. Notable performances were recorded by Germany, the UK and the
Benelux countries.
Middle East and Africa`s revenues grew by 19.9% to $456.3 million, and
operating profit expanded from $30.7 million to $40.4 million at a margin of
8.9%. All four key components of the business - Dimension Data, Plessey,
Internet Solutions and Merchants - performed well.
The Dimension Data brand business grew by 26.6%. Growth on the African
continent and in the Middle East gained momentum, while South Africa remains
the key contributor. Strong performances were recorded by the Network
Integration, Converged Communications and Security lines of business, as well
as from the cabling division. By revenue stream, Product sales were up by 33.0%
and Services by 14.9%. Results from the Professional Services division were
much improved, while lower Managed Services margins were reported for the
period.
Plessey`s revenues declined by 4.9% compared to a very strong revenue
performance in the comparable period, but gross profit was up strongly by
45.4%. This reflected a change in mix of revenues in favour of more profitable
territories, as well as some benefit during the period from a weaker South
African Rand. The business continues to enjoy significant opportunities in
South Africa, particularly in the rollout of fibre infrastructure, and in the
provision of mobile infrastructure services throughout Africa.
Internet Solutions (IS) delivered another strong performance, expanding
revenues by 29.6%, with gross margins remaining stable. Demand in the core
internet access, Virtual Private Network and hosting lines of business was
robust. IS`s African operations also expanded, supported by the acquisition at
the end of the period of Accelon, a broadband communications service provider
operating in Nigeria and in Ghana.
Merchants South Africa had a good half, with continued demand for its
outsourced call centre offerings leading to revenue growth of 12.5% for the
half year.
In Central and Other, net costs reduced from $15.1 million to $14.6 million.
Within this, the contribution from the Campus property was up by 25.8% for the
period to $8.3 million, reflecting firmer rental rates and near full
occupation. Central management costs, net of trading income, increased by 10.0%
to $22.9 million. Apart from the normal holding company costs, the Group
continued to invest in its Services and Lines of Business strategies, and in
the standardisation of Group -wide systems and processes.
Lines of Business
The Group`s Network Integration line of business grew by 16.6%, extending the
strong performance reported last year and retaining our global leadership in
the plan, build, support and management of networks. Growth was underpinned by
the refresh cycle and supported by our investment in new technologies,
including wireless networks to support mobility, performance optimisation to
improve the performance of services and applications over networks, and
operations management to drive services efficacy and service level adherence.
Security had an excellent half, growing by 35.6%. Security technology continues
to permeate all aspects of the corporate infrastructure, including the network,
the data centre, the desktop and mobile devices. This is increasingly important
as organisations seek to enable convergence and more collaborative and mobile
business models.
The security industry remains characterised by multiple technologies and
vendors, and the Group is extremely well positioned to provide integrated
solutions to local and multinational clients.
Converged Communications grew by 20.9%, as mainstream adoption of IP -based
telephony continued. Growth was supported by our ongoing investment in
enhancing our IP telephony deployment methodologies and managed IP telephony
services. Visual communications solutions were an increasing component of this
line of business.
The Microsoft Solutions line of business grew by 15.4%, with strong
performances in Africa and Australia. The gross profit contribution from this
line of business was significantly higher, a result of increased professional
services business in these two regions. In addition, our recent investments in
Asia and the UK are starting to show encouraging signs of growth and
sustainability. The Group has seen a considerable increase in clients piloting
and deploying Unified Communications solutions and has consequently benefited
from projects upgrading and managing core Microsoft infrastructure. This
combined with the accelerated deployment of Microsoft Vista means that the
Group is well positioned to benefit from its investments in this line of
business.
The CIS line of business was up by 13.7%. The continued migration to IP-based
contact centres, the demand for process improvement solutions and the
consolidation of vendor platforms positions the Group well to benefit from
growth in this market. The results for the half were mixed, with Africa,
Europe and Asia performing strongly, while Australia was disappointing.
Merchants, the outsourcing business performed well, particularly in South
Africa.
Our DCS line of business grew by 16.6% fuelled by demand for our server
virtualisation, storage consolidation, and backup and recovery solutions. The
line of business was also supported by increased interest in `green IT`
solutions as clients investigate ways to reduce the carbon footprint of their
data management infrastructure.
Revenue Streams
Product revenues grew by 15.4%, supported by solid growth across all of our
lines of business and gross margins were firmer. By geography, growth in the
Americas, Middle East and Africa, and Asia was most pronounced, while in Europe
and Australia growth was in single digits. Good demand was experienced in the
public sector and service provider segments, while the financial services
segment was resilient despite challenging macro economic conditions. In
addition, our offerings to multinational clients continued to expand and to
differentiate us in the marketplace.
Services growth of 17.8% reflected strong performances in all regions. Growth
in Managed and Professional Services of 18.4% and 17.0% respectively, was
supported by good contributions from the regional services businesses,
including Internet Solutions.
Managed Services growth was particularly strong in Africa, Asia and Australia,
reflecting the ongoing strength of the Dimension Data offering in the market
place. Changing buying patterns within our clients towards the selective
outsourcing of distinct elements of their infrastructure, as well as the
introduction of new Managed Services offerings, drove growth. Managed Services
margins were lower for the period, as the Group was less able to pass on
increased costs to its clients in tougher economic conditions.
Professional Services growth across the board was coupled with a strong
improvement in gross margin, the result of a focused effort to improve
processes and efficiencies in the delivery of Professional Services
engagements. This resulted in improved project management, better utilisation
of resources and reduced attrition rates within the organisation.
Share of Profit of Associates
The share of profit of associates increased to $3.8 million from $3.1 million
in 2007.
Good contributions were made by Dataflo, Marpless and Britehouse.
Interest Income and Finance Costs
The Group earned interest of $6.5 million (H1 2007: $5.5 million) on its cash
holdings, which were $396.7 million at 31 March 2008 (31 March 2007: $357.0
million). Total finance costs were $15.3 million (H1 2007: $13.6 million),
including $12.0 million (H1 2007: $11.2 million) on the capitalised property
finance lease in South Africa.
Property Revaluation and Other Gains and Losses
Based on the Directors` assessment of fair value at 31 March 2008, a gain on
revaluation of the investment portion of the Campus of $3.6 million (H1 2007:
$13.6 million) was recorded.
A similar revaluation arose in H1 2007, which was previously disclosed as
exceptional, has been restated as a normal gain, consistent with the treatment
for the full year in 2007.
Acquisitions and Disposals
During the period, the Group concluded a few small acquisitions, none of which
were material.
Our Asian subsidiary acquired a small security practice in New Zealand. In
Australia, we acquired Viiew, an IT recruitment and resourcing company, and the
remaining minority interest in SQL Services, a Microsoft solutions provider. In
Africa we acquired Accelon, a broadband communications service provider
operating in Nigeria and in Ghana.
Automate, a software development company providing solutions to the automotive
industry, was sold to Britehouse during the period.
Balance Sheet
Non-current assets
Capital expenditure on property, plant and equipment (net of disposals) was
$39.9 million, compared to $25.3 million in the same period last year. The
biggest increase came from South Africa, where Internet Solutions invested in
its network as a consequence of growth in its client base and to upgrade its
voice capabilities. Dimension Data in South Africa refreshed its network,
invested in power generation facilities at the Campus to support increased
demand and in land adjacent to the Campus to be used for future expansion.
In addition, Merchants in the UK invested in the establishment of a stand-alone
IP call centre hosting capability.
Capex
$ million Six Six Year
months months ended
ended ended
March March Sept
2008 2007 2007
Americas 1 1 3
Asia 4 5 8
Australia 3 1 4
Europe 6 2 8
ME&A, excluding
IS 8 5 4
Internet Solutions 16 12 31
Central and Other 2 - -
Group 40 26 58
Depreciation
$ million Six Six Year
months months ended
ended ended
March March Sept
2008 2007 2007
Americas 1 1 2
Asia 4 3 8
Australia 3 2 4
Europe 3 4 8
ME&A, excluding
IS 5 4 3
Internet Solutions 9 6 16
Central and Other 1 - 6
Group 26 20 47
Long term trade and other receivables increased to $49.4 million from $36.8
million at the end of last year as a result of the upfront purchase of vendor
support services associated with multi-year managed services contracts, mainly
in the UK and the US.
Current assets
The 6.1% year on year increase in inventories to $198.5 million (H1 2007:
$187.0 million) is a good result given the much higher revenue growth in the
business. This reflects ongoing focus on inventory management, but also lower
revenue growth in some of the inventory intensive businesses, notably Express
Data. Trade and other receivables grew by 24.7%, with trade receivables
themselves up by 27.6%. This reflects weaker than expected collections at
period end in the US, Australia, the UK and Italy, which have been largely
resolved subsequent to period end.
Non-current liabilities
Obligations under finance lease of $132.9 million relate predominantly to the
property finance lease in South Africa. Other long term liabilities of $42.2
million, up from $31.2 million at the end of last year, include vendor
financing relating to the purchase of vendor services for long term maintenance
contracts, mainly in the UK and the US.
Current liabilities
Trade and other payables of $1,230.9 million, were up 20.5% compared to 31
March 2007. Trade payables themselves of $452.3 million were up 19.3%, in line
with the increase in revenue. There were no material changes in the underlying
payment terms with our vendors.
Cash Flow
Net cash from operating activities was $40.1 million (H1 2007: $56.2 million).
The increase in net working capital of $58.9 million was the result of a higher
growth in trade and other receivables than in trade and other payables, offset
by lower growth in inventories. While we expect some seasonal increase in
working capital in the first half, the investment in working capital does
reflect weaker receivables collections in a few territories at the end of the
period. A significant portion of the collection delays were resolved subsequent
to period end.
The Group used $41.9 million in investing activities, including $39.9 million
of capital expenditure on property, plant and equipment and intangibles, and
$4.9 million on acquisitions.
In addition, $26.8 million was invested in shares in the Employee Share Trust
to settle employee share incentive obligations. This resulted in a net
decrease in share capital and share premium of $6.9 million.
At the end of the year, cash and cash equivalents were $396.7 million compared
to $459.2 million at 30 September 2007, while bank overdrafts decreased from
$3.4 million to $1.0 million.
Principal Risks and Uncertainties
The principal risks and uncertainties which could impact the Group for the
remainder of the current financial year are those detailed on pages 23 and 24
of the Group`s 2007 Annual Report.
The identified risks are: execution and delivery, people retention, currency,
vendor, liquidity, business continuity and new product and technology. A copy
of the Group`s 2007 Annual Report is available on our website at
www.dimensiondata.com . Additional operational risk factors which could impact
the Group are addressed in the Chief Executive Officer`s Review. These include:
uncertain global market conditions, the extent of future IT Infrastructure
spend and growth in the financial services sector.
Exchange rates
The following table reflects the average and period end exchange rates against
the US dollar for SA rand, Australian dollar, Sterling and Euro:
Six months ended Six months ended
31 March 2008 31 March 2007
Period Period
Average End Average End
Australian dollar 1.105 1.090 1.278 1.237
Euro 0.669 0.633 0.772 0.749
South African rand 7.244 8.123 7.273 7.256
Sterling 0.495 0.501 0.518 0.508
Year ended
30 September 2007
Period
Average End
Australian dollar 1.229 1.126
Euro 0.746 0.701
South African rand 7.142 6.871
Sterling 0.509 0.488
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 31 March 2008
Six months Six months Year ended 30
ended 31 ended 31 September
March 2008 March 2007 2007
Notes $`000 $`000 $`000
Revenue 2 2,171,212 1,770,140 3,773,156
Cost of sales (1,709,002) (1,399,873) (2,960,169)
Gross profit 462,210 370,267 812,987
Administrative,
selling and
distribution expenses (377,194) (321,842) (689,120)
Operating profit 85,016 48,425 123,867
Share of results of
associates 3,751 3,103 5,740
Interest and
investment income 7,841 5,480 15,446
Finance costs (15,276) (13,559) (30,315)
Property
revaluation and
other gains and losses 8,456 13,141 35,767
Profit before tax 89,788 56,590 150,505
Tax 4 (22,885) (14,260) (36,034)
Profit for the period 66,903 42,330 114,471
Attributable to:
- Equity
shareholders of the parent 55,881 32,613 92,528
- Minority shareholders 11,022 9,717 21,943
66,903 42,330 114,471
Earnings per
ordinary share:
US cents US Cents US Cents
- Basic 6 3.7 2.1 6.0
- Diluted 6 3.4 2.0 5.6
CONDENSED CONSOLIDATED BALANCE SHEET
As at 31 March 2008
Six months Six months Year ended 30
ended 31 ended 31 September
March 2008 March 2007 2007
Notes $`000 $`000 $`000
Non-current assets
Property, plant
and equipment 161,207 145,552 165,014
Investment property 80,156 79,670 92,805
Goodwill 95,414 84,826 90,557
Other intangible assets 11,807 13,630 16,914
Investments in associates 33,708 20,999 30,381
Other investments 4,753 7,627 6,971
Deferred tax assets 40,386 28,101 41,248
Trade and other
receivables 7 49,432 47,539 36,804
476,863 427,944 480,694
Current assets
Inventories 198,472 187,012 192,658
Trade and other
receivables 7 1,070,609 858,441 1,003,554
Cash and cash
equivalents 396,716 357,038 459,197
1,665,797 1,402,491 1,655,409
TOTAL ASSETS 2,142,660 1,830,435 2,136,103
Equity
Equity attributable
to equity shareholders
of the parent 560,701 491,838 561,947
Minority interests 130,473 105,881 128,242
Total equity 691,174 597,719 690,189
Non-current
liabilities
Bank loans 4,034 3,509 4,144
Other long term
liabilities 42,156 27,581 31,207
Obligations under
finance leases 132,944 139,033 149,919
Deferred tax
liabilities 1,773 1,493 2,295
Provisions 8,568 6,258 9,517
189,475 177,874 197,082
Current liabilities
Trade and other
payables 8 1,230,913 1,021,454 1,213,153
Bank loans 14,869 22,589 20,475
Bank overdrafts 1,022 5,337 3,439
Provisions 15,207 5,462 11,765
1,262,011 1,054,842 1,248,832
Total liabilities 1,451,486 1,232,716 1,445,914
TOTAL EQUITY AND
LIABILITIES 2,142,660 1,830,435 2,136,103
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 March 2008
Six months
ended Six months ended Year ended 30
31 March 2008 31 March 2007 September 2007*
$`000 $`000 $`000
Cash flows from
operating activities
Operating profit 85,016 48,425 123,867
Adjustments for:
Depreciation and
amortisation 30,174 23,054 52,680
Movement in provisions 2,218 2,305 9,492
Share-based payment
expensed 9,211 9,212 24,457
Other non-cash items (1,620) (993) 2,684
Operating cash flows
before movements in
working capital 124,999 82,003 213,180
(Increase)/decrease
in inventories (6,869) (4,518) 1,349
Increase in trade and
other receivables (78,687) (68,930) (168,037)
Increase in trade and
other payables 26,686 69,073 185,837
Cash generated from
operations 66,129 77,628 232,329
Income taxes paid (13,385) (11,007) (30,619)
Interest paid (12,683) (10,439) (24,609)
Net cash from
operating activities 40,061 56,182 177,101
Cash flows from
investing activities
Interest received 7,841 5,274 15,445
Net investment in
business interests
and intangible assets (4,932) (5,855) (1,240)
Acquisition of
property, plant and
equipment, net of
proceeds on disposal (39,890) (25,303) (59,712)
Treasury share buy
back by a subsidiary (1,169) (4,762) (6,854)
Deferred
consideration paid (3,748) (5,500) (5,500)
Net cash used in
investing activities (41,898) (36,146) (57,861)
Cash flows from
financing activities
Shares purchased by
Employee Share Trust (26,774) - (25,476)
Repayment of
borrowings (4,962) (3,776) (7,338)
New bank loans and
finance leases 4,507 2,885 16,476
Dividends paid to
ordinary shareholders (23,282) (15,170) (15,170)
Dividends paid to
minorities (9,366) (9,896) (10,602)
Proceeds on issue of
new shares net of
expenses 2,907 2,757 6,712
Net cash used in
financing activities (56,970) (23,200) (35,398)
Net movement in cash
and cash equivalents (58,807) (3,164) 83,842
Cash and cash
equivalents at
beginning of period 455,758 341,673 341,673
Exchange differences
on cash and cash
equivalents (1,257) 13,192 30,243
Cash and cash
equivalents at end of
period 395,694 351,701 455,758
Cash and cash
equivalents is made
up as follows:
Cash and cash
equivalents 396,716 357,038 459,197
Bank overdrafts (1,022) (5,337) (3,439)
395,694 351,701 455,758
* Restated
Cash flows on shares purchased by the Employee Share Trust have been
reclassified in FY 2007 from investing to financing activities to more
accurately reflect their nature.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Total Retained Attributable
capital other earnings to equity
and reserves* holders of
Premium parent
$`000 $`000 $`000 $`000
214,929 200,597 22,022 437,548
1 October 2006
Profit for the period - - 32,613 32,613
Items recognised
directly in equity 2,757 38,611 (19,691) 21,677
Share incentive schemes - 7,338 - 7,338
Currency adjustments - 24,601 - 24,601
Deferred tax arising on
revaluation of loans - 589 - 589
Dividends paid - - (15,170) (15,170)
Shares issued 2,757 - - 2,757
Subsidiaries
acquired/changes
in holdings - - - -
Net losses on
cash flow hedging - (2,046) - (2,046)
Revaluation of
investment property - 5,584 - 5,584
Deferred tax on
revaluation of
investment property - (1,619) - (1,619)
Other - (710) 353 (357)
Transfers - 4,874 (4,874) -
31 March 2007 217,686 239,208 34,944 491,838
Minority Total
interests equity
$`000 $`000
105,540 543,088
1 October 2006
Profit for the period 9,717 42,330
Items recognised directly in equity (9,376) 12,301
Share incentive schemes - 7,338
Currency adjustments 144 24,745
Deferred tax arising on revaluation of loans - 589
Dividends paid (9,896) (25,066)
Shares issued - 2,757
Subsidiaries acquired/changes in holdings 347 347
Net losses on cash flow hedging - (2,046)
Revaluation of investment property - 5,584
Deferred tax on revaluation of investment property - (1,619)
Other 29 (328)
Transfers - -
31 March 2007 105,881 597,719
Share Total Retained Attributable
capital other earnings to equity
and reserves* holders of
Premium parent
$`000 $`000 $`000 $`000
214,929 200,597 22,022 437,548
1 October 2006
Profit for the period - - 92,528 92,528
Items recognised
directly in equity (18,764) 61,106 (10,471) 31,871
Share incentive schemes - 15,581 - 15,581
Deferred tax on
share incentive schemes - 7,336 - 7,336
Share option reserve
utilised - (1,020) - (1,020)
Currency adjustments - 52,467 - 52,467
Deferred tax
arising on revaluation
of loans - (471) - (471)
Dividends paid - - (15,170) (15,170)
Shares issued 6,712 - - 6,712
Shares held in
employee trust (25,476) - - (25,476)
Subsidiaries
acquired/changes
in holdings - 262 - 262
Vesting under
BEE scheme - (8,260) - (8,260)
Revaluation of
investment property - 5,756 - 5,756
Deferred tax on
revaluation of
investment property - (1,669) - (1,669)
Movement in
investment valuations - 255 - 255
Transfers to
income statement - (4,260) - (4,260)
Other - (172) - (172)
Transfers - (4,699) 4,699 -
30 September 2007 196,165 261,703 104,079 561,947
Minority Total
interests equity
$`000 $`000
105,540 543,088
1 October 2006
Profit for the period 21,943 114,471
Items recognised directly in equity 759 32,630
Share incentive schemes - 15,581
Deferred tax on share incentive schemes - 7,336
Share option reserve utilised - (1,020)
Currency adjustments 441 52,908
Deferred tax arising on
revaluation of loans - (471)
Dividends paid (10,600) (25,770)
Shares issued - 6,712
Shares held in employee trust - (25,476)
Subsidiaries acquired/changes in holdings 3,645 3,907
Vesting under BEE scheme 8,260 -
Revaluation of
investment property - 5,756
Deferred tax on
revaluation of investment property - (1,669)
Movement in investment valuations - 255
Transfers to income statement - (4,260)
Other (987) (1,159)
Transfers - -
30 September 2007 128,242 690,189
Share Total Retained Attributable
capital other earnings to equity
and reserves* holders of
premium parent
$`000 $`000 $`000 $`000
196,165 261,703 104,079 561,947
1 October 2007
Profit for the period - - 55,881 55,881
Items recognised
directly in equity (3,972) (14,575) (38,580) (57,127)
Share incentive schemes - 7,522 - 7,522
Deferred tax on
share incentive schemes - 1,307 - 1,307
Settlement of share schemes - (7,556) (12,866) (20,422)
Currency adjustments - (20,902) - (20,902)
Deferred tax arising on
revaluation of loans - 415 - 415
Dividends paid - - (23,282) (23,282)
Shares issued 2,907 - - 2,907
Net movement in
shares held in
employee trust (6,879) - - (6,879)
Subsidiaries
acquired/changes in holdings - - - -
Net gains on cash
flow hedging - 2,429 - 2,429
Movement in
investment valuations - (429) - (429)
Transfers to
income statement - 291 - 291
Other - (84) - (84)
Transfers - 2,432 (2,432) -
31 March 2008 192,193 247,128 121,380 560,701
Minority Total
interests equity
$`000 $`000
128,242 690,189
1 October 2007
Profit for the period 11,022 66,903
Items recognised directly in equity (8,791) (65,918)
Share incentive schemes - 7,522
Deferred tax on share incentive schemes - 1,307
Settlement of share schemes - (20,422)
Currency adjustments (1,517) (22,419)
Deferred tax arising on
revaluation of loans - 415
Dividends paid (4,244) (27,526)
Shares issued - 2,907
Net movement in shares held in employee trust - (6,879)
Subsidiaries acquired/changes in holdings (3,030) (3,030)
Net gains on cash flow hedging - 2,429
Movement in investment valuations - (429)
Transfers to income statement - 291
Other - (84)
Transfers - -
31 March 2008 130,473 691,174
* Other reserves principally comprise consolidation reserves arising prior to
the unbundling of the underlying assets into the Company at the time of its LSE
listing in 2000.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 31 March 2008
1. BASIS OF PREPARATION
Statutory financial information
The unaudited interim results have been prepared in accordance with accounting
policies and methods of computation based on International Financial Reporting
Standards (IFRS`s) as adopted by the European Union, and presented in terms of
IAS 34 `Interim Financial Reporting` which has been applied for the first time.
The unaudited interim results have been prepared on a basis consistent with the
accounting policies set out in the Dimension Data Holdings plc Annual Report
for the year ended 30 September 2007, with the following exceptions:
IFRS 7 `Financial Instruments: Disclosures`. This standard was adopted from 1
October 2007. This has not had an impact on measurement, but will necessitate
additional disclosures as prescribed by the standard to be reflected in the
2008 Annual Report.
IFRIC 11 `IFRS 2: Group and Treasury Share Transactions`. This interpretation
was adopted from 1 October 2007 and has not had a material effect on the Group.
The tax charge on underlying business performance is calculated by reference to
the estimated effective tax rate for each jurisdiction for the full year 2008.
Tax on disposal and exceptional items is based on the expected tax impact of
each item.
The preparation of the interim financial statements in conformity with the
Group`s accounting policies requires the Directors to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the balance sheet date, and
the reported amounts of revenue and expenses during the reported period.
Whilst these estimates and assumptions are based on the Directors` best
knowledge of the amount, events or actions, actual results may differ from
those estimates.
The unaudited interim condensed consolidated financial statements for the six
months ended 31 March 2008, which were approved by the Board of Directors on 13
May 2008 and which include certain comparative information with respect to the
year ended 30 September 2007, do not constitute statutory accounts within the
meaning of section 240 of the Companies Act 1985 (`the Act`). Full accounts for
the year ended 30 September 2007, prepared in accordance with International
Financial Reporting Standards, incorporating an unqualified independent
auditors` report, have been filed with the Registrar of Companies and did not
contain a statement under section 237(2) or (3) of the Act.
The Group has a balance of businesses globally. Historically, the Northern
hemisphere operations have, ignoring underlying growth trends, reflected a bias
of trading towards the first half of the financial year, and our Southern
hemisphere businesses towards the second half. In recent periods, at a Group
level, on balance there has been a slight bias in trading towards the second
half of the year, although there is no guarantee that in an uncertain economic
environment this trend will continue.
Copies of this report are being sent to shareholders, and are available to the
public at the Company`s registered office, Fleet Place House, 2 Fleet Place,
London EC4M 7RT.
2. SEGMENTAL ANALYSIS
Middle
East &
Americas Asia Australia Europe Africa
$`000 $`000 $`000 $`000 $`000
Six months
ended 31
March 2008
Revenue 349,261 353,787 511,303 577,377 511,794
Operating
profit 8,431 23,481 19,164 8,109 40,432
Six months
ended 31
March 2007
Revenue** 279,889 272,513 413,972 480,465 426,636
Operating
profit*** 5,524 16,606 13,059 4,284 30,679
Twelve
months ended
30 September 2007
Revenue 585,043 580,829 912,004 981,683 931,582
Operating
profit*** 17,398 36,456 29,169 8,522 70,877
Inter-
Central Company
& other* sales Total
$`000 $`000 $`000
Six months ended 31
March 2008
Revenue 12,169 (144,479) 2,171,212
Operating profit (14,601) - 85,016
Six months ended 31
March 2007 Revenue** 6,808 (110,143) 1,770,140
Operating profit*** (15,120) - 55,032
Twelve months ended
30 September 2007
Revenue 16,065 (234,050) 3,773,156
Operating profit*** (31,428) - 130,994
* Includes Central management costs, net of Central trading and Campus income.
** Restated for certain inter -company revenue in line with treatment for the
full year.
*** Before exceptional items.
3. EXCEPTIONAL INCOME/(COSTS)
Note Six months Six months Year ended
ended 31 ended 31 30
March March September
2008 2007 2007
$`000 $`000 $`000
Exceptional operating costs
Foreign exchange loss on loans - (6,607) (6,617)
Other - - (510)
Total exceptional
operating costs - (6,607) (7,127)
Other exceptional gains
and losses a) 3,691 - 13,736
Exceptional tax
Deferred tax credit - 3,817 4,197
Capital gains tax on sale of shares - - (2,055)
Tax on withholding costs refund - - (965)
Total exceptional tax - 3,817 1,177
Exceptional items after tax 3,691 (2,790) 7,786
Minorities` share - (1,244) (1,354)
Net exceptional
income/(costs) 3,691 (4,034) 6,432
a) Profit on sale of the Group`s 92.3% interest in Automate to Britehouse (see
Note 9). The amount in respect of 30 September 2007 includes the profit on sale
of subsidiaries.
At the interim to 31 March 2007, the revaluation of the Campus property was
disclosed as exceptional. However for the full year ended 30 September 2007 the
amount was disclosed as a normal gain, as such revaluations are likely to be a
recurring feature of the Group`s results. As a consequence the results to 31
March 2007 have been restated.
Reconciliation of reported amounts to
adjusted amounts
Six months Six months Year ended
ended 31 ended 31 30
March March September
2008 2007 2007
$`000 $`000 $`000
Statutory operating profit 85,016 48,425 123,867
Exceptional operating costs - 6,607 7,127
Adjusted operating profit 85,016 55,032 130,994
Statutory attributable profit
after tax 55,881 32,613 92,528
- Exceptional operating costs - 6,607 7,127
- Other exceptional gains and losses (3,691) - (13,736)
- Exceptional tax credits - (3,817) (1,177)
- Minorities` share - 1,244 1,354
Adjusted attributable profit after
tax 52,190 36,647 86,096
4. TAX
Six months Six months Year ended
ended 31 ended 31 30
March March September
2008 2007 2007
$`000 $`000 $`000
Current tax 23,692 11,556 37,715
Deferred tax - current period (3,098) 6,697 854
Deferred tax - prior periods* 2,291 (3,993) (2,535)
Total tax expense 22,885 14,260 36,034
This expense relates predominantly to tax jurisdictions outside of the United
Kingdom.
5. DIVIDENDS PER SHARE
A final dividend of 1.5 cents per share was paid on 14 March 2008. No interim
dividend is proposed.
6. EARNINGS PER SHARE
Six months Six months Year ended
ended 31 ended 31 30
March March September
2008 2007 2007
`000 `000 `000
Weighted average number of
ordinary shares:
- for basic earnings per share 1,526,817 1,542,114 1,539,744
- for diluted earnings per share 1,650,092 1,648,975 1,657,256
$`000 $`000 $`000
Earnings for basic and diluted
earnings per
share 55,881 32,613 92,528
Exceptional items (3,691) 4,034 (6,432)
Adjusted earnings 52,190 36,647 86,096
US Cents US Cents US Cents
Basic earnings per share 3.7 2.1 6.0
Diluted earnings per share 3.4 2.0 5.6
Adjusted basic earnings per share 3.4 2.4 5.6
Adjusted diluted earnings per share 3.2 2.2 5.2
The weighted average number of ordinary shares in issue excludes the shares
held by the Employee Share Trust.
7. TRADE AND OTHER RECEIVABLES
31 March 31 March September 30
2008 2007 2007
$`000 $`000 $`000
Trade receivables 832,847 652,617 767,654
Other receivables 105,968 92,503 96,916
Prepayments and accrued income 157,866 141,374 143,075
Taxation authorities 23,360 19,486 32,713
1,120,041 905,980 1,040,358
Analysed as follows:
Long term portion 49,432 47,539 36,804
Short term portion 1,070,609 858,441 1,003,554
1,120,041 905,980 1,040,358
8. TRADE AND OTHER PAYABLES
31 March 31 March September 30
2008 2007 2007
$`000 $`000 $`000
Trade payables 452,314 379,168 448,828
Other payables 164,356 149,028 178,555
Accruals 282,235 204,382 266,741
Deferred income 200,936 177,733 188,625
Deferred consideration - 2,476 1,712
Taxation authorities 131,072 108,667 128,692
1,230,913 1,021,454 1,213,153
9. ACQUISITIONS AND DISPOSALS
With effect from 1 February 2008 the Group disposed of its 92.3% interest in
Automate to Britehouse for a total consideration of $15.4 million, settled
partly in cash and partly in shares.
During the period, the Group made several small acquisitions of subsidiaries
for an aggregate consideration of $10.6 million, with $14.2 million recognised
as goodwill on acquisition. The total assets and liabilities, in aggregate for
these acquisitions amounted to $7.1 million and $10.7 million, respectively.
These did not have a significant impact on the reported results.
10. POST BALANCE SHEET EVENTS
There have been no material events requiring disclosure after balance sheet
date and up to the date of approval of these financial statements.
11. CONTINGENT ASSETS AND LIABILITIES
The Group is subject to various claims and litigation which arise in the
ordinary course of business. Each claim is evaluated by management, together
with their legal advisers, and a decision is made on whether financial
settlement is probable, in which case appropriate provisions have been made.
The Directors believe that, subject to a reasonable outcome on the matters
still to be determined, the provisions are sufficient to meet the likely
outcomes of such claims.
There is an ongoing legal claim in South Africa where the plaintiff is claiming
$17.9 million and interest for an issue that dates back to 2001. The case has
two elements, merit and quantum, and a trial date has now been set for November
2008 to hear the merit case. Based on our legal advice, the Group continues to
believe that the claim is without merit and will vigorously defend its
position. Accordingly no provision has been made for this claim.
12. RELATED PARTY TRANSACTIONS
During the interim period the Group sold its 92.3% interest in Automate to
Britehouse, in which the Group holds an effective 40% interest. VenFin Limited,
a shareholder of Dimension Data Holdings plc, holds an effective 30% interest
in Britehouse and a BEE consortium owns the remaining 30%. Moss Ngoasheng, a
director of Dimension Data Holdings plc, is an indirect shareholder of the
consortium.
There were no other changes during the period in the related party transactions
described in the last Annual Report that could have a material effect on the
financial position or performance of the Group.
13. JSE LIMITED REQUIREMENTS
Disclosure of headline earnings per share is a requirement for entities listed
on the JSE Limited in South Africa and as a result, the Group has calculated
and presented a headline earnings reconciliation below. Headline earnings are
arrived at in terms of the guidance in Circular 8/2007 issued by the South
African Institute of Chartered Accountants.
Six months Six months Year ended
ended 31 ended 31
March March September 30
2008 2007 2007
`000 `000 `000
Weighted average number of
ordinary shares:
- for headline earnings per share 1,526,817 1,542,114 1,539,744
- for diluted headline earnings
per share 1,650,092 1,648,975 1,657,256
$`000 $`000 $`000
Earnings for basic and diluted
earnings per
share 55,881 32,613 92,528
Adjustments for headline earnings (6,112) (7,906) (27,075)
Headline earnings 49,769 24,707 65,453
US Cents US Cents US Cents
Headline earnings per share 3.3 1.6 4.3
Diluted headline earnings per
share 3.0 1.5 3.9
The adjustments for headline earnings include the revaluation of the Campus
investment property, profits and losses on the sale of subsidiaries and the
loss on sale of property, plant and equipment, net of tax and minorities.
CAUTIONARY STATEMENT
This Interim Management Report (`IMR`) has been prepared solely to provide
additional information to shareholders to assess the Group`s strategies and the
potential for those strategies to succeed. The IMR should not be relied on by
any other party or for any other purpose.
The IMR contains certain forward-looking statements. These statements are made
by the Directors in good faith based on the information available to them up to
the time of their approval of this report and such statements should be treated
with caution due to the inherent uncertainties, including both economic and
business risk factors, underlying any such forward-looking information.
STATEMENT OF DIRECTORS` RESPONSIBILITIES
We confirm that to the best of our knowledge:
a) the condensed set of financial statements which has been prepared in
accordance with IAS 34, gives a true and fair view of the assets, liabilities,
financial position and profit of Dimension Data Holdings plc, as required by
DTR 4.2.4R;
b) the interim management report includes a fair review of important events
during the first six months and a description of the principal risks and
uncertainties for the remaining six months of the year, as required by DTR
4.2.7R; and
c) the interim management report includes a fair review of the disclosure of
related parties` transactions and changes therein, as required by DTR 4.2.8R.
By order of the Board
Brett Dawson Dave Sherriffs
Chief Executive Officer Chief Financial Officer
13 May 2008
INDEPENDENT REVIEW REPORT TO DIMENSION DATA HOLDINGS PLC
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
March 2008 which comprises the condensed consolidated income statement, the
condensed consolidated balance sheet, the condensed consolidated statement of
changes in equity, the condensed consolidated cash flow statement and related
notes 1 to 13. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing
Practices Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to them in an independent review
report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the Company, for our
review work, for this report, or for the conclusions we have formed.
Directors` responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom`s Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRS`s as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, `Interim Financial Reporting`, as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standards on Review
Engagements (UK and Ireland) 2410, ` Review of Interim Financial Information
Performed by the Independent Auditor of the Entity` issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 March 2008 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom`s Financial Services Authority.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditor
13 May 2008
London
United Kingdom
Enquiries:
Dimension Data Holdings plc
Jeremy Ord, Chairman
Brett Dawson, Chief Executive Officer
David Sherriffs, Chief Financial Officer
Karen Cramer, Investor Relations (UK)
Mobile: +(44) 793 202 0296
Office: +(44) 20 7651 7017
karen.cramer@uk.didata.com
Kevin Handelsman, Investor Relations (SA)
Office: +(27) 11 575 3632
Mobile: +(27) 82 453 9945
kevin.handelsman@za.didata.com
Internet address: www.dimensiondata.com
Press enquiries:
Hilary King
Global PR Manager
Dimension Data Holdings plc
Mobile: +(27) 82 414 9623
Office: +(27) 11 575 3632
hilary.king@za.didata.com
Financial Dynamics
James Melville-Ross
Mobile: +(44) 7909 684 467
Matt Dixon
Mobile: +(44) 7703 330 913
Office: +(44) 20 7269 7214
Erwan Gauraud
Office: +(44) 20 7269 7289
Date: 14/05/2008 08:00:19 Produced by the JSE SENS Department.
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