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DCT
DCT
DCT - Datacentrix - Unaudited interim results for the six months ended
31 August 2009
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 2009
Key Financial Indicators
Headline earnings per share (HEPS) remained the same at 26.8 cents
Earnings per share (EPS) increased from 26.7 cents to 26.8 cents
Net asset value increased by 6% to 195.6 cents
Earnings before interest, tax, depreciation and amortisation (EBITDA)
increased by 8% to R79.7 million
Cash generated from operations of R80.5 million resulted in cash on hand of
R240 million
Interim dividend of 13.4 cents per share
Abridged Consolidated Income Statement for the six months ended 31 August 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28
2009 2008 February
R`000 R`000 2009
R`000
Revenue 687 587 699 234 1 513 322
Operating profit 70 649 67 963 153 176
Net interest received 8 495 10 456 23 304
Profit before taxation 79 144 78 419 176 480
Income taxation expense (26 633) (26 069) (56 061)
- normal and deferred taxation (23 143) (22 990) (50 314)
- secondary taxation on companies (3 490) (3 079) (5 747)
Earnings for the period attributable to 52 511 52 350 120 419
ordinary shareholders
Basic earnings per ordinary share 26.8 26.7 61.5
(cents)
Diluted basic earnings per ordinary 26.6 26.4 61.0
share (cents)
Dividend per share (cents) 13.4 13.0 30.0
Headline earnings per ordinary share 26.8 26.8 61.5
(cents)
Diluted headline earnings per ordinary 26.5 26.4 61.0
share (cents)
Weighted average number of shares in 195 785 195 785 195 785
issue* (000s)
Weighted average number of shares in 197 379 198 212 197 295
issue for purposes of dilution* (000s)
*adjusted for treasury shares
Earnings before interest, taxation, 79 733 73 652 165 534
depreciation and amortisation (EBITDA)
Reconciliation between earnings for the
period attributable to ordinary
shareholders and headline earnings
52 511 52 350 120 419
Earnings attributable to ordinary
shareholders
(Profit) loss on sale of assets (110) 45 (64)
Earnings for the purpose of basic and 52 401 52 395 120 355
diluted headline earnings per share
Abridged Consolidated Balance Sheet at 31 August 2009
Unaudited Unaudited Audited
31 August 31 August 28
2009 2008 February
R`000 R`000 2009
R`000
ASSETS
Non-current assets 83 278 77 968 82 623
Property and equipment 46 028 33 111 41 275
Goodwill 15 596 15 596 15 596
Other intangible assets - software 2 258 1 883 1 542
Deferred taxation assets 17 325 23 059 20 954
Long-term receivables 2 071 4 319 3 256
Current assets 481 487 481 969 527 710
Inventories 19 125 11 062 10 438
Trade and other receivables 216 485 262 866 284 431
Current taxation asset 6 210 - -
Cash and cash equivalents 239 667 208 041 232 841
TOTAL ASSETS 564 765 559 937 610 333
EQUITY AND LIABILITIES
Capital and reserves 383 000 318 647 360 625
Share capital 21 21 21
Share premium 37 381 37 354 37 366
Treasury shares (37 336) (37 116) (37 166)
Equity-settled share scheme reserve 18 572 15 872 15 272
Retained earnings 364 362 302 516 345 132
Non-current liability 12 915 17 353 16 328
Deferred revenue - long-term portion 12 915 17 353 16 328
Current liabilities 168 850 223 937 233 380
Trade and other payables 131 786 162 281 179 511
Provisions 1 084 1 568 1 132
Deferred revenue - short-term portion 32 545 32 254 43 505
Lease smoothing liability 1 558 259 1 145
Current taxation liabilities 1 877 27 575 8 087
TOTAL EQUITY AND LIABILITIES 564 765 559 937 610 333
Net asset value (adjusted for treasury 195.6 162.7 184.2
shares) per share (cents)
Tangible net asset value (adjusted for 186.5 153.8 175.4
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 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 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 payments - - - 3 200 - 3 200
Dividends - - - - (29 373) (29 373)
Profit on sale of - (791) - - - (791)
treasury shares
Balance at 31 August 21 37 354 (37 116) 15 872 302 516 318 647
2008
Profit for the - - - - 68 069 68 069
period
Treasury shares - - (50) - - (50)
movement
Share-based payments - - - (600) - (600)
Dividends - - - - (25 453) (25 453)
Profit on sale of - 12 - - - 12
treasury shares
Balance at 28 21 37 366 (37 166) 15 272 345 132 360 625
February 2009
Profit for the - - - - 52 511 52 511
period
Treasury shares - - (170) - - (170)
movement
Share-based payments - - - 3 300 - 3 300
Dividends - - - - (33 281) (33 281)
Profit on sale of - 15 - - - 15
treasury shares
Balance at 31 August 21 37 381 (37 336) 18 572 364 362 383 000
2009
Abridged Consolidated Cash Flow Statement for the
six months ended 31 August 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
`09 `08 `09
R`000 R`000 R`000
Profit before taxation 79 144 78 419 176 480
Adjusted for non-cash items 4 207 (2 133) (8 259)
Working capital changes (2 887) (44 177) (35 581)
- Inventory (8 687) (86) 538
- Trade and other accounts receivable 67 946 (29 468) (49 339)
- Trade, other accounts payable and (62 146) (14 623) 13 220
liabilities
Cash generated from operations 80 464 32 109 132 640
Net interest received 8 495 10 456 23 304
Dividend paid (33 281) (29 373) (54 826)
Taxation paid (35 424) (22 960) (70 335)
Net cash inflow (outflow) from operating 20 254 (9 768) 30 783
activities
Net cash outflow from investing (13 258) (1 688) (16 566)
activities
Net cash outflow from financing (170) (2 399) (3 272)
activities
Net increase (decrease) in cash and cash 6 826 (13 855) 10 945
equivalents
Cash and cash equivalents at the 232 841 221 896 221 896
beginning of the period
Cash and cash equivalents at the end of 239 667 208 041 232 841
the period
Basis of Preparation
The abridged interim financial statements of the Group are prepared as a going
concern on a historical cost basis, except for certain financial instruments
which are stated at amortised cost or fair value. The abridged interim
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
("IFRS"), have been consistently applied in all material respects in the
current and comparative periods, except for the IFRS 8 Operating Segments
standard which has an effect only on disclosure. The Group has adopted IFRS
8, Operating Segments which requires that the segments shown are those that
the Chief Operating Decision Maker uses internally to make operating
decisions. All significant disclosures as required by this standard have been
included in this commentary. All other new interpretations and standards
were assessed and adopted. These results have not been reviewed or reported on
by the Group`s auditors.
The Business of Datacentrix
Datacentrix is a leading, empowered ICT integrator that provides high
performing, secure ICT solutions to the corporate and the public service
sectors throughout South Africa. Its main activities comprise the supply,
integration and optimisation of IT infrastructure, business solutions and
related services to its client base.
Commentary
The directors of Datacentrix present the interim financial results of the
Group for the period ended 31 August 2009. While the overall results are flat,
strong performances were recorded in all but one business unit. The
fundamentals of the business remain sound, including in the poor performing
business unit which experienced significant deal slippage. Previously
identified strategic growth areas have showed strong performance and the Group
will continue to cautiously invest in the areas that are closely aligned to
the core focus of the Group.
Both HEPS and EPS remained on approximately the same levels at 26.8 cents.
Operating performance (EBITDA) increased by 8% to R79.7 million. Cash
generated from operations was a robust R80.5 million, with cash on hand of
R240 million, with no interest-bearing debt. Tangible net asset value per
share increased by 6% from 175 cents to 187 cents per share.
Segmental Analysis
Infrastructure Managed Services Business Solutions
Unaudited 6 31 Aug 31 Aug 31 Aug 31 Aug 31 Aug 31 Aug
months ended `09 `08 `09 `08 `09 `08
R`000 R`000 R`000 R`000 R`000 R`000
Revenue 522 510 582 935 149 533 118 901 52 424 39 842
Operating 46 864 55 605 16 747 8 499 7 070 4 112
profit
Net interest - - - - - -
received
Profit 46 864 55 605 16 747 8 499 7 070 4 112
before
taxation
Income tax (13 591) (16 126) (4 857) (2 465) (2 050) (1 192)
expense
- normal and (13 591) (16 126) (4 857) (2 465) (2 050) (1 192)
deferred
taxation
- secondary - - - - - -
taxation on
companies
Earnings for 33 273 39 479 11 890 6 034 5 020 2 920
the period
attributable
to ordinary
shareholders
Segment 429 586 464 550 95 549 59 469 24 321 20 601
assets
Segment 135 409 202 654 34 160 26 762 12 000 11 776
liabilities
Segmental Analysis (continue)
Other Total Group
Unaudited 6 31 Aug `09 31 Aug `08 31 Aug `09 31 Aug `08
months ended R`000 R`000 R`000 R`000
Revenue (36 880) (42 444) 687 587 699 234
Operating (32) (253) 70 649 67 963
profit
Net interest 8 495 10 456 8 495 10 456
received
Profit before 8 463 10 203 79 144 78 419
taxation
Income tax (6 135) (6 286) (26 633) (26 069)
expense
- normal and (2 645) (3 207) (23 143) (22 990)
deferred
taxation
- secondary (3 490) (3 079) (3 490) (3 079)
taxation on
companies
Earnings for 2 328 3 917 52 511 52 350
the period
attributable
to ordinary
shareholders
Segment assets 15 309 15 317 564 765 559 937
Segment 196 98 181 765 241 290
liabilities
The Infrastructure and Managed Services Divisions continue to ensure that they
hold the highest sales, pre-sales and technical vendor accreditations,
ensuring that they remain the most cost effective partners for the supply,
installation and ongoing maintenance of equipment, over the entire lifespan of
such equipment. Datacentrix has solidified its position as an HP GOLD
Preferred Partner, recognising the Group as one of HP`s top performing and
most engaged partners in the various specialisations, it is also one of only
two fully accredited HP Storage Works Solutions Specialists and is a fully
certified Service Specialist Authorised Service Partner. Datacentrix has
retained its status as an IBM Premier Partner and Microsoft Gold Certified
Partner.
The Infrastructure Division has seen good performance in almost all except for
one business unit for the six months under review. Whilst spending slowed in
the traditional client base, the division increased wallet share in newer
clients. This together with the broadening of the portfolio of services has
resulted in good performances from most business units.
Encouraging performances were noted in newly identified growth areas,
including the Managed Print Services (MPS), Outsourcing and Resourcing
businesses. The Outsourcing business revenue has seen a healthy improvement,
with a recent sizable win for desktop maintenance and service desk outsource
for a leading telecommunications company. The Outsource business has also re-
signed a significant contract that had come to term. The Managed Print
Services business unit won a number of deals in the period under review
including its involvement in the FIFA Confederations Cup. This unit
strengthened its execution engine and increased efficiencies resulting in
improved profitability. The significant performance improvements in the
Managed Services Division resulted in a higher contribution to the Group
performance.
The Business Solutions division has successfully developed its ERP business
unit over the six month period, seeing growth from its existing clients
seeking improved capabilities from existing systems. Datacentrix` business
process management (BPM) clients, Vodacom and Medihelp, recently received
awards at ITWeb`s inaugural BPM Excellence awards ceremony. The Enterprise
Content Management business has seen healthy double digit growth contributing
to an improved performance.
The Group`s senior management team was strengthened with the promotion of
Kenny Nkosi to the position of MD for the government business unit with effect
from 1 September 2009. He brings with him a wealth of experience and the Group
has full confidence in his ability to take the government business to the next
level.
The current economic turmoil has further offered Datacentrix the opportunity
to strengthen its management team through the recruitment of senior management
skills who became available within the marketplace. The Group is committed to
investing in its management and execution capabilities and to enhancing its
competitive position to capture opportunities in the markets.
Directorate
The board is pleased to announce the appointment of Mrs Dudu Nyamane to the
board with effect 29 June 2009. Mrs Nyamane rejoins the board after serving
for a period and we look forward to her invaluable contribution.
Prospects
Datacentrix monitors global and local industry trends and the impact thereof
on the industry. Company CIOs continue to be under pressure to cut costs in
the face of revenue challenges. Whilst there has been much talk of "green
shoots", the macroeconomic environment remains challenging and uncertain,
resulting in limited visibility of future trading conditions. Datacentrix
expects to maintain its market share in an evidently tough 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 Group continues to
find a market, despite tough financial times and tight budgets.
Dividend
An interim dividend of 13.4 cents has been declared in line with the dividend
policy of two times cover on HEPS.
Declaration date: Tuesday, 06 October 2009
Last day to trade: Friday, 23 October 2009
Share trade ex dividend: Monday, 26 October 2009
Record date: Friday, 30 October 2009
Payment date: Monday, 02 November 2009
Share certificates may not be dematerialised or rematerialised between 26
October 2009 and 30 October 2009, both days inclusive.
For and on behalf of the Board:
Gary Morolo
Chairman
6 October 2009
Directors: Gary Morolo (Non-executive Chairman), Ahmed Mahomed (CEO), Alwyn
Martin*, Dudu Nyamane*, Elizabeth Naidoo (FD), Joan Joffe*, Thenjiwe Chikane*
*independent, non-executive
Company Secretary: Ithemba Governance and Statutory 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: 06/10/2009 12:55:01 Produced by the JSE SENS Department.
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