| Tue 21 Apr 2009, 12:58 | | DCT - Datacentrix - Audited results for the financial year ended 28 February |
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DCT
DCT
DCT - Datacentrix - Audited results for the financial year ended 28 February
2009, appointment of director and notice of annual general meeting
DATACENTRIX HOLDINGS LIMITED
REGISTRATION NUMBER: 1998/006413/06
JSE CODE: DCT
ISIN: ZAE000016051
("Datacentrix" or "the Group")
AUDITED RESULTS FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2009, APPOINTMENT OF
DIRECTOR AND NOTICE OF ANNUAL GENERAL MEETING
- Key Financial Indicators
- Revenue increased 12% to more than R1.5 billion
- EBITDA increased 5% to R165.5 million
- Basic earnings per share (EPS) and basic headline earnings per share
(HEPS) increased 18% to 61.5 cents
- Cash on hand of R232.8 million, with no interest-bearing debt
- Cash generated from operations of R132.6 million
- Final dividend declared of 17.0 cents per share, bringing annual dividend
to 30.0 cents per share
- Tangible net asset value per share increased 24% from 141.4 to 175.4
cents per share
Condensed Consolidated Income Statement for the year ended 28 February
2009
Audited Audited
2009 2008
R`000 R`000
Revenue 1 513 322 1 346 971
Operating profit 153 176 146 942
Net interest received 23 304 9 137
Profit before taxation 176 480 156 079
Income taxation expense (56 061) (54 214)
Earnings attributable to ordinary shareholders 120 419 101 865
Basic earnings per ordinary share (cents) 61.5 52.0
Diluted basic earnings per ordinary share 61.0 51.0
(cents)
Proposed and declared dividend per share 30.0 26.0
(cents)
Earnings before interest, taxation, 165 534 157 096
depreciation and amortisation (EBITDA)
Headline earnings per ordinary share (cents) 61.5 52.0
Diluted headline earnings per ordinary share 61.0 51.0
(cents)
Weighted average number of shares in issue* 195 785 195 785
(000`s)
Weighted average number of shares in issue for 197 295 199 634
the purpose of dilution* (000`s)
*adjusted for treasury shares
Reconciliation between earnings attributable
to ordinary shareholders
and headline earnings
Earnings attributable to ordinary shareholders 120 419 101 865
Profit on sale of property and equipment (64) (74)
Headline earnings 120 355 101 791
Condensed Consolidated Balance Sheet as at 28 February 2009
Audited Audited
2009 2008
R`000 R`000
ASSETS
Non-current assets 82 623 79 185
Property and equipment 41 275 32 018
Intangible assets 17 138 17 740
Long-term receivables 3 256 6 259
Deferred tax assets 20 954 23 168
Current assets 527 710 469 344
Inventories 10 438 10 976
Trade and other receivables 284 431 236 472
Cash and cash equivalents 232 841 221 896
TOTAL ASSETS 610 333 548 529
EQUITY AND LIABILITIES
Capital and reserves 360 625 294 476
Share capital 21 21
Share premium 37 366 38 145
Treasury shares (37 166) (35 901)
Equity-settled share scheme reserve 15 272 12 672
Retained earnings 345 132 279 539
Non-current liability
Deferred revenue 16 328 19 327
Current liabilities 233 380 234 726
Trade and other payables 179 511 180 660
Provisions 1 132 2 071
Deferred revenue 43 505 27 205
Lease smoothing liability 1 145 215
Current taxation liabilities 8 087 24 575
TOTAL EQUITY AND LIABILITIES 610 333 548 529
Net asset value (adjusted for treasury shares) 184.2 150.4
per share (cents)
Tangible net asset value (adjusted for 175.4 141.4
treasury shares) per share (cents)
Weighted average number of shares in issue 195 785 195 785
(000`s)
Condensed Consolidated Statement of Changes in Equity for the year ended
28 February 2009
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 - - - - 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
Profit for the - - - - 120 419 120 419
year
Treasury shares - - (1 265) - - (1 265)
movement
Share-based - - - 2 600 - 2 600
payments
Dividend paid - - - - (54 826) (54 826)
Loss on sale of - (779) - - - (779)
treasury shares
in trust
Balance at 28 21 37 366 (37 166) 15 272 345 132 360 625
February 2009
Condensed Consolidated Cash Flow Statement for the year ended 28 February
2009
Audited Audited
2009 2008
R`000 R`000
Profit before taxation 176 480 156 079
Adjusted for non-cash items (8 259) 2 164
Working capital changes (35 581) 5 927
- Inventory 538 (1 575)
- Trade and other accounts receivable (49 339) (25 309)
- Trade, other accounts payable and liabilities 13 220 32 811
Cash generated from operations 132 640 164 170
Net interest received 23 304 9 137
Dividend paid (54 826) (47 380)
Taxation paid (70 335) (46 525)
Net cash inflow from operating activities 30 783 79 402
Net cash outflow from investing activities (16 566) (19 206)
Net cash outflow from financing activities (3 272) (12 141)
Net increase in cash and cash equivalents 10 945 48 055
Cash and cash equivalents at beginning of the 221 896 173 841
year
Cash and cash equivalents at the end of the year 232 841 221 896
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 condensed 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 years. All new
interpretations and standards were assessed and adopted with no material
impact.
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 condensed financial
information as well as their accompanying unmodified audit report on the
annual financial statements is available for inspection at the Group`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 are pleased to announce the annual financial
results of the Group for the year ended 28 February 2009. Datacentrix has
shown resilience in its performance over the past year, in a deteriorating
economic environment, with most divisions showing reliable performances.
Strategically targeted growth areas have shown encouraging development and the
Group will continue to cautiously invest in these offerings and services,
which are closely aligned to the core focus of the businesses.
Both headline earnings per share (HEPS) and earnings per share (EPS) increased
by 18% to 61.5 cents. Operating performance (EBITDA) increased by 5% to R165.5
million. Cash generated from operations was R132.6 million, with cash on hand
of R232.8 million, with no interest-bearing debt. Tangible net asset value
per share increased by 24% from 141.4 to 175.4 cents per share.
The Business of Datacentrix
Datacentrix is a leading, empowered ICT integrator that provides high
performing, secure ICT solutions to corporate South Africa and the public
services sector. Its main activities comprise the supply, integration and
optimisation of IT infrastructure, business solutions and related services to
its client base. It operates throughout South Africa.
Infrastructure and Managed Services
The year has been positive but challenging for the Infrastructure and Managed
Services division, with public sector showing healthy growth. Encouraging
performances were noted in new target growth areas, including the Managed
Print Services (MPS), Security, Resourcing and Microsoft Software Services
businesses. The division continues to be a leading provider for the supply,
deployment, maintenance and support of integrated IT infrastructure. In the
year under review this division produced organic growth contributing R1.4
million (2008: R1.3 million) and R140.3 million (2008: R131.4 million) to the
Group`s segment revenue and segment result for the year respectively.
Datacentrix has furthermore invested in enhancing its infrastructure services
capability. This investment in improved operational capacity of the division
is in support of its infrastructure solutions portfolio and an ever increasing
client footprint. The Group continues in its single minded approach to
uncompromising service delivery to which its clients have become accustomed.
The division strengthened its MPS execution engine and increased efficiencies
resulting in improved profitability. The business unit has won sizeable deals
in the year under review and clients continue to show a keen interest in the
value proposition provided by this offering.
The division is encouraged by the success achieved in the recently formalised
Resourcing business unit, which focuses on the provision of selected, on-site
resources to meet client specifications. The unit is positioned to assist its
clients in addressing the high demands placed on businesses to become cost
efficient in today`s challenging environment. This is done by providing a
flexible staff resourcing solution.
The Security business unit is updating the initial version of its biometrics
security solution and is currently in the final stage of completing its second
major installation. The company is encouraged by the developments in the
focused Networking business unit addressing two main areas: bandwidth
optimisation - dealing with solutions designed to improve bandwidth
utilisation, latencies and efficiencies; and the provisioning of network
infrastructure focusing on new network technologies. In addition the
Enterprise Systems Management business unit provides management solutions
spanning basic network management through to application management.
The Infrastructure and Managed Services division continues to ensure that it
holds the highest sales, pre-sales and technical vendor accreditations,
ensuring that it remains the most cost effective partner for the supply,
installation and ongoing maintenance of equipment, over the entire lifespan of
such equipment. This commitment to technical excellence has contributed to
Datacentrix garnering a number of accolades from its vendors such as HP, IBM,
Citrix and VMware.
The Group has met Service Level Agreement objectives set to maintain the
highest level of client satisfaction. Services focus on assisting clients at
every stage of the product lifecycle - ranging from needs determination,
product evaluation, configuration, installation and support. This is in line
with the continuous service improvement program, which the Group ascribes to
in order to meet and exceed client needs and expectations.
Solutions
The Business Process Management (BPM) business unit remains focused on
workflow and data-mining and has shown very good growth in the year under
review. Datacentrix is the only Platinum Partner of Sourcecode / K2 Workflow
in South Africa. The business unit develops on the latest K2 Workflow server
technology called "K2 BlackPearl" and has standardised on Microsoft SharePoint
as a document file repository, typically for all the electronic forms that are
automated by BPM systems. The Enterprise Resource Planning business, whilst
profitable, remains under pressure and it is anticipated that this will remain
so in the in the year ahead.
The Enterprise Content Management (ECM) business was adversely affected not
only because of current market conditions, but also as a result of some
vendors changing their route to market in the Archiving and Enterprise Content
Management spaces. The business is transitioning to becoming increasingly
product agnostic and services led, focused primarily on the enterprise content
management and information lifecycle management space.
Overall the Solutions business has maintained profitability with a segment
result of R13.4 million (2008: R16 million) and contributed R81 million (2008:
R66.6 million) to the Group`s segment revenue.
Black Economic Empowerment
Datacentrix has regained its EmpowerDex A rating and is again a Level Four (4)
Contributor, with realistic prospects of achieving Level Three (3) Contributor
status. Achievement on the majority of indices is high and is targeted for
further improvement. However, no solution to black equity participation, the
key area where Datacentrix underperforms relative to the other indices, was
achieved in the year under review, despite a variety of initiatives pursued by
the board. These efforts are ongoing albeit in a much tougher environment to
raise either debt or equity, especially for empowerment transactions. A key
goal for the board remains to find a solution that would preferably also bring
staff into significant equity ownership as part of retention strategy of key
management and technical staff.
Board and Management changes
Other pressuring commitments have caused Mr. Israel Skosana and Ms. Dudu
Nyamane to resign from the board during the course of the year. Their
contribution has been valuable and the board wishes to extend its gratitude to
both of them.
The board is happy to announce the appointment of Mrs. Thenjiwe Chikane to the
board and the audit and risk committee with effect 20 April 2009.
Prospects
Datacentrix continues to closely monitor local industry trends and the impact
of the current economic climate on the IT industry nationally and globally.
Many companies are cutting costs in the face of dwindling revenues. This type
of rationalisation has led to a number of South African IT companies
restructuring and retrenching staff, creating opportunities in the market.
Datacentrix is currently expanding its offerings and skill sets and therefore
does not anticipate retrenchments in the coming year.
The macroeconomic environment is challenging and uncertain, resulting in
reduced visibility of future trading conditions. Datacentrix expects to hold
its own and maintain its market share in an evidently tough and deteriorating
environment. An integral part of Datacentrix` business model has always been
to focus on "must have" instead of "nice to have" offerings. That way the
company continues to play in that space, despite tough financial times and
tight budgets. In some instances some corporates are looking to IT to achieve
much needed operational savings.
Datacentrix has continued to grow organically and has in the past year
invested significantly in targeted new skills and competencies higher up the
value chain. This investment is evident in a higher salary cost. Future growth
for the Group will be supplemented by selective acquisition of pockets of
excellence in identified growth areas. Due regard will be given in the coming
year to the need to contain costs and to conserve capital.
The board has every expectation of remaining profitable and showing growth in
the coming year and has the confidence in management to continue with the
application, dedication, and execution capability that has ensured good
results in the past.
Dividend
A final normal dividend of 17.0 cents has been declared, which is in line with
the divided policy of two times cover on headline earnings per share. This
brings the dividend to a total of 30.0 cents declared for the full year.
Declaration date: Tuesday, 21 April 2009
Last day to trade: Friday, 08 May 2009
Share trade ex dividend: Monday, 11 May 2009
Record date: Friday, 15 May 2009
Payment date: Monday, 18 May 2009
Share certificates may not be dematerialised or re-materialised between
Monday, 11 May 2009 and Friday, 15 May 2009, both days inclusive.
Annual General Meeting
It is expected that the annual report will be dispatched to shareholders no
later than 13 May 2009. Notice is hereby given that the annual general meeting
of the company will be held at the company`s registered office on 5 June 2009
at 10:00.
For and on behalf of the Board:
Gary Morolo, Chairman
20 April 2009
Directors: Gary Morolo (Chairman), Ahmed Mahomed (CEO), Alwyn Martin*,
Elizabeth Naidoo, Joan Joffe*, Thenjiwe Chikane*
*independent, non-executive
Company Secretary: Ithemba Statutory and Governance Solutions (Proprietary)
Limited
Registered Office: Block 7, Sanwood Park, 379 Queens Crescent, Lynnwood,
Pretoria
Transfer Secretaries: Computershare Investor Services (Proprietary) Limited,
70 Marshall Street, Johannesburg
Sponsor: Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited
Date: 21/04/2009 12:58:01 Produced by the JSE SENS Department.
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