| Tue 7 Oct 2008, 13:00 | | DCT - Datacentrix Holdings - Unaudited Interim Results For The Six |
|
DCT
DCT
DCT - Datacentrix Holdings - Unaudited Interim Results For The Six
Months Ended 31 August 2008 and dividend declaration
DATACENTRIX HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER: 1998/006413/06)
JSE CODE: DCT
ISIN: ZAE000016051
("Datacentrix" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2008
Key Financial Indicators
- Headline earnings per share (HEPS) increased 21% to 26.8 cents
- Earnings per share (EPS) increased 20% to 26.7 cents
- Net asset value increased by 8% to 162.7 cents
- EBITDA increased 11% to R73.7 million
- Cash generated from operations of R32 million resulting in cash on hand
of R208 million
- Interim dividend of 13 cents per share
Abridged Consolidated Income Statement for the six months ended 31 August
2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 29
2008 2007 February
R`000 R`000 2008
R`000
Revenue 699 234 693 711 1 346 971
Operating profit 67 963 61 584 146 942
Net interest received 10 456 5 950 9 137
Profit before taxation 78 419 67 534 156 079
Income tax expense (26 069) (24 043) (54 214)
- normal and deferred taxation (22 990) (20 656) (48 569)
- secondary taxation on companies (3 079) (3 387) (5 645)
Earnings for the period attributable to 52 350 43 491 101 865
ordinary shareholders
Basic earnings per ordinary share 26.7 22.2 52.0
(cents)
Diluted basic earnings per ordinary 26.4 21.7 51.0
share (cents)
Headline earnings per ordinary share 26.8 22.2 52.0
(cents)
Diluted headline earnings per ordinary 26.4 21.7 51.0
share (cents)
Dividend per share (cents) 13.0 11.0 15.0
Weighted average number of shares in 195 785 195 785 195 785
issue* (000s)
Weighted average number of shares in 198 212 200 129 199 634
issue for purposes of dilution* (000s)
*adjusted for treasury shares
Earnings before interest, taxation, 73 652 66 428 157 096
depreciation and amortisation (EBITDA)
Reconciliation between earnings for the period attributable to ordinary
shareholders and headline earnings
52 350 43 491 101 865
Earnings attributable to ordinary
shareholders
Loss (profit) on sale of assets 45 (49) (74)
Earnings for the purpose of basic and 52 395 43 442 101 791
diluted earnings per share
Abridged Consolidated Balance Sheet at 31 August 2008
Unaudited Unaudited Audited
31 August 31 August 29
2008 2007 February
R`000 R`000 2008 R`000
ASSETS
Non-current assets 77 968 64 400 79 185
Property and equipment 33 111 31 094 32 018
Software 1 883 1 025 2 144
Goodwill 15 596 15 596 15 596
Deferred tax assets 23 059 14 009 23 168
Long-term receivables 4 319 2 676 6 259
Current assets 481 969 434 320 469 344
Inventories 11 062 10 006 10 976
Trade and other receivables 262 866 217 056 236 472
Cash and cash equivalents 208 041 207 258 221 896
TOTAL ASSETS 559 937 498 720 548 529
EQUITY AND LIABILITIES
Capital and reserves 318 647 263 146 294 476
Share capital 21 21 21
Share premium 37 354 40 095 38 145
Treasury shares (37 116) (31 331) (35 901)
Equity-settled share scheme reserve 15 872 11 642 12 672
Retained earnings 302 516 242 719 279 539
Non-current liabilities 17 353 22 768 19 327
Obligations under finance leases - 823 -
Deferred revenue 17 353 21 945 19 327
Current liabilities 223 937 212 806 234 726
Trade and other payables 148 346 156 459 165 408
Provisions 15 503 13 234 17 323
Deferred revenue 32 254 27 886 27 205
Lease liability 259 393 215
Current tax liabilities 27 575 14 834 24 575
TOTAL EQUITY AND LIABILITIES 559 937 498 720 548 529
Net asset value (adjusted for treasury 162.7 134.4 150.4
shares) per share (cents)
Tangible net asset value (adjusted for 153.8 125.9 141.4
treasury shares) per share (cents)
Weighted average number of shares in 195 785 195 785 195 785
issue (000s)
Abridged Consolidated Statement of Changes in Equity for the six months ended
31 August 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 40 709 (25 958) 8 642 225 054 248 468
February 2007
Profit for the - - - - 43 491 43 491
period
Treasury shares - - (5 373) - - (5 373)
movement
Share-based - - - 3 000 - 3 000
payments
Dividends - - - - (25 826) (25 826)
Profit on sale of - (614) - - - (614)
treasury shares
Balance at 31 21 40 095 (31 331) 11 642 242 719 263 146
August 2007
Profit for the - - - - 58 374 58 374
period
Treasury shares - - (4 570) - - (4 570)
movement
Share-based - - - 1 030 - 1 030
payments
Dividends - - - - (21 554) (21 554)
Profit on sale of - (1 950) - - - (1 950)
treasury shares
Balance at 29 21 38 145 (35 901) 12 672 279 539 294 476
February 2008
Profit for the - - - - 52 350 52 350
period
Treasury shares - - (1 215) - - (1 215)
movement
Share-based - - - 3 200 - 3 200
payments
Dividends - - - - (29 373) (29 373)
Profit on sale of - (791) - - - (791)
treasury shares
Balance at 31 21 37 354 (37 116) 15 872 302 516 318 647
August 2008
Abridged Consolidated Cash Flow Statement for the six months ended 31
August 2008
Unaudited Unaudited Audited
6 months 6 months 12
ended 31 ended 31 months
August August ended 29
2008 2007 February
R`000 R`000 2008
R`000
Profit before taxation 78 419 67 534 156 079
Adjusted for non-cash items (2 133) 1 164 2 164
Working capital changes (44 177) 12 705 5 927
- Inventory (86) (605) (1 575)
- Trade and other accounts receivable (29 468) (8 038) (25 309)
- Trade, other accounts payable and (14 623) 21 348 32 811
liabilities
Cash generated from operations 32 109 81 403 164 170
Net interest received 10 456 5 950 9 137
Dividend paid (29 373) (25 826) (47 380)
Taxation paid (22 960) (16 859) (46 525)
Net cash (outflow) inflow from operating (9 768) 44 668 79 402
activities
Net cash outflow from investing activities (1 688) (4 807) (19 206)
Net cash outflow from financing activities (2 399) (6 444) (12 141)
Net (decrease) increase in cash and cash (13 855) 33 417 48 055
equivalents
Cash and cash equivalents at the beginning 221 896 173 841 173 841
of the period
Cash and cash equivalents at the end of the 208 041 207 258 221 896
period
Basis of Preparation
The abridged 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 Listings 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 periods. All
new interpretations and standards were assessed and adopted with no material
impact. These results have not been reviewed or reported on by the auditors.
Commentary
The directors of Datacentrix present the unaudited interim financial results
of the Group for the six months ended 31 August 2008. The Group shows a flat
top line, however with creditable headline earnings per share (HEPS) increase
of 21% to 26.8 cents and earnings per share (EPS) increase of 20% to 26.7
cents. Operating performance (EBITDA) increased by 11% to R73.7 million.
Cash generated from operations was R32 million. Datacentrix retains strong
prospects within both the public and private sectors. Within the context of
the economic and political climate the directors are confident that the
current investment in key technical skills and sales capacity will stand the
company in good stead.
Infrastructure and Related Services
The Infrastructure and Related Services division continues 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, the division contributed R661 million (2007: R658 million) and R62.5
million (2007: R51.8 million) to the Group`s revenue and segment result for
the period respectively. The division is a HP and Microsoft Gold Certified
Partner, IBM Premier Partner and holds some of the highest industry
accreditations. This together with the high level of service provided to
customers reaffirms the real value we add as a trusted partner to both our
vendors and customers.
The performances over the past six months is attributable to lower volumes
and slower spend in traditional accounts in the Gauteng private sector base,
increased fixed costs due to the demand for scarce resources and investment
in the division`s technical and sales capacity in new growth areas. In
contrast the public sector, coastal and services business units showed
healthy organic growth. The growth in services has impacted positively on
the division`s net margin. We continue to ensure that the Group is accredited
by its vendors at the highest possible level both in the technical and sales
arenas. The continued expansion of our service offering has enabled us to
provide additional services to customers, further enhancing our strategic
value as a single source service provider. The Group will continue to invest
in its services capability to add increasing value to its product offering.
This commitment ensures that the division is a cost effective partner for the
supply, installation and maintenance of equipment over its entire lifecycle,
providing customers with the ability to focus their resources on their core
business.
Client satisfaction is the foundation of our business. Our full service
focus on the supply and support of IT Infrastructure ensures ease of
engagement. Clients are assisted through the various processes including
needs assessment, product evaluation and selection, configuration,
installation and the support of the infrastructure thereafter.
Solutions
The Workflow and Development business unit has won major projects in the
areas of workflow during the period with blue chip clients, resulting in good
organic growth for the period. The Workflow business is seeing strong demand
driven by enterprise customers seeking better efficiencies. The Optimisation
business unit serving the electronic content management and archiving areas
has been affected by longer than usual selling cycles; however some new
contracts have recently been won which positions the business unit favourably
for the next six months.
Overall, the Solutions business performed below expectation with a segment
result at R5.4 million (2007: R9.7 million) and it contributed R38 million
(2007: R35 million) to the Group`s segment revenue.
Board and Management changes
Rainer Jeske has been appointed Managing Director of the Technology Solutions
Business unit, a sub division of Infrastructure and Related Services. Rainer
has been with Datacentrix for 11 years and brings with him a wealth of
experience to his new role.
Empowerdex Rating
The board is on record as having declared the strengthening of empowerment
credentials a priority for Datacentrix, and all the elements of broad
empowerment required by the Codes are under active review, including
specifically, broad based ownership. Satisfactory progress has been made to
date with all the other elements and Datacentrix has regained A rating (level
four contributor) after a temporary dip to a level B rating. However
Datacentrix still underperforms significantly in the ownership and equity
aspects and is currently reviewing initiatives which will enable us to
reclaim our preeminent status in all of the elements of the DTI BEE codes of
Good Practice.
Prospects
Datacentrix continues to consolidate its position in the market space and
given due consideration to the economic outlook, currently remains positive.
Though more complex opportunities are taking longer to conclude, both the
private and government sector show healthy activity in IT projects and as
always Datacentrix expects to maintain or increase market share. Management
is confident that the investment in identified growth areas such as security,
Microsoft services, managed print solutions, resourcing and selective
outsourcing, will bear fruits in the future. The group is well positioned to
capitalise on the opportunities outlined above.
The directors wish to thank staff, customers and business partners for their
dedicated and constructive support.
Dividend
An interim dividend of 13.0 cents has been declared in line with our dividend
policy of two times cover on HEPS.
Declaration date : Monday, 06 October 2008
Last day to trade : Friday, 24 October 2008
Shares trade ex dividend : Monday, 27 October 2008
Record date : Friday, 31 October 2008
Payment date : Monday, 03 November 2008
Share certificates may not be dematerialised or rematerialised between 27
October 2008 and 31 October 2008, both days inclusive.
For and on behalf of the Board:
Gary Morolo, Chairman
7 October 2008
Directors: Gary Morolo (Chairman)*, Ahmed Mahomed (CEO), Elizabeth Naidoo
(CFO), Alwyn Martin*, Dudu Nyamane*, Israel Skosana*, Joan Joffe*
(*non-executive)
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: 07/10/2008 13:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
