| Wed 12 Oct 2011, 8:00 | | DTC - Datatec Limited - Unaudited interim results for the six months ended 31 |
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DTC
DTC
DTC - Datatec Limited - Unaudited interim results for the six months ended 31
August 2011 and interim cash distribution by way of a capital reduction
Datatec ("Datatec" or the "Group"
(JSE and LSE: DTC))
Registration number 1994/005004/06
Share code: DTC
ISIN: ZAE000017745
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2011 AND INTERIM
CASH DISTRIBUTION BY WAY OF A CAPITAL REDUCTION
FINANCIAL HIGHLIGHTS
- Group revenue up 14% to $2,44 billion (H1 FY11: $2,13 billion)
- Overall gross margin expanded to 14,1% (H1 FY11: 13,2%)
- EBITDA up 46% to $85,4 million (H1 FY11: $58,5 million)
- Underlying* earnings per share up 38% to 21,8 US cents(H1 FY11: 15,8 US cents)
- First interim capital distribution per share of 7 US cents
- Total capital distributions since 2006 of $125 million (approximately R1
billion)
*Excluding goodwill and intangibles impairment, amortisation of acquired
intangible assets, acquisition related adjustments, profit or loss on sale of
assets and businesses, fair value movements on acquisition related financial
instruments and unrealised foreign exchange movements.
OPERATIONAL HIGHLIGHTS
- Benefitting from business diversification, international scale and market
share gains
- Continuing strong financial performance and operational leverage
- Improved business mix and growing annuity income stream
- Earnings increase at more than twice revenue growth rate
COMMENTARY
Jens Montanana, Chief Executive of Datatec, commented:
"These are very good results given the current environment. Despite the
difficult economic conditions around the world, we have been able to grow
revenues and improve margins in all divisions.
In this economic climate many customers and suppliers are increasingly seeking
to do business with large well capitalised multi-national companies. This is
directly benefiting the Group as our businesses are gaining market share in many
of the markets and geographies in which we operate.
Gross margins and profits are up significantly as we continue to benefit from
operating leverage and an improving business mix. Based on current trading
conditions and exchange rates, our forecast for the full year remains unchanged.
We are pleased to be paying our first interim capital distribution, which will
result in a total of $125 million (approximately R1 billion) having been
distributed to shareholders since 2006, reflecting the stability of the Group`s
performance."
Profile and Group structure
Datatec Group is a global provider of ICT products, solutions and services. The
Group was founded in 1986 and over the past 25 years has grown into a multi-
national organisation employing more than
5000 people worldwide with operations in more than 40 countries.
Datatec`s main lines of business comprise: the global distribution of advanced
networking and communications convergence products ("Westcon"); ICT
infrastructure solutions and services ("Logicalis"); and Consulting Services
("Analysys Mason" and "Intact"). "Corporate" encompasses the net operating costs
of the Group`s head office entities.
Overview
Datatec delivered an excellent performance during the first half of the
financial year, despite difficult trading conditions in many markets. The
Group`s strong operational improvement seen in the prior year continued, with
substantial growth in revenue and profitability compared with the six months
ended 31 August 2010 ("Comparative Period").
This performance is being driven by a combination of market share gains, strong
operational leverage and a robust performance in emerging and developing
markets, which now contribute 35% of Group gross profits. Based on current
trading conditions and exchange rates, the Group`s forecast for the full year
remains unchanged.
Datatec holds a strong market share in most of its business segments, with no
particular dependency on any market, territory or technology. Datatec`s business
mix improved during the first half. In Westcon there has been a significant
increase in sales of security products and in Logicalis annuity revenues
increased.
Datatec`s global reach and diversification across developed and emerging
economies continue to help insulate the Group against regional volatility and
have enabled a strong operational performance. Despite softer global economic
conditions, Asia Pacific, Latin America, the Middle East and Africa remain the
best performing markets. Across Europe and North America we continued to perform
well in a challenging environment. Global revenues are now split equally across
North America, Europe and the rest of the world.
Trading and profitability continued to improve across the Group, driven by
robust top line growth in both Westcon and Logicalis, up 11% and 26%
respectively. Overall Group gross margins have firmed and operating margins are
continuing to expand.
Datatec generated revenues of $2,44 billion in the six months up to 31 August
2011, up 14% (H1 FY11: $2,13 billion). Organic growth was 13% and overall gross
margins expanded to 14,1% (H1 FY11: 13,2%).
The Group continues to benefit strongly from operational leverage, with EBITDA
increasing faster than revenues ($85,4 million, up 46% (H1 FY11: $58,5
million)).
Underlying earnings per share rose 38% to 21,8 US cents per share (H1 FY11: 15,8
US cents).
Strategy
Datatec continues to pursue its long-term strategy of delivering sustainable
above average returns to shareholders by focusing on a combination of organic
growth in fast growing sectors of the ICT market, geographic expansion and
earnings enhancing acquisitions. During the first half, the Group announced the
acquisition of three businesses aimed at strengthening its position in existing
major markets.
In April 2011 Logicalis UK acquired Inca Software, an IBM Cognos partner in the
UK in order to create one of the first UK systems integrators capable of
delivering the full suite of next generation business transformation tools:
analytics, collaboration and cloud computing. In July 2011, Logicalis US
acquired Netarx, a Cisco Gold partner and provider of managed services, data
centre and collaborative IT solutions to customers in the mid-west USA. In
August 2011 Westcon acquired entrada Kommunikations, a German based, value added
distributor of IT security products to significantly grow its German presence
and enter the Swiss market.
The Group will seek to improve its competitive position and believes that the
current economic climate has created a window of opportunity for further
attractive consolidation opportunities to enhance margins, facilitate
consolidation in proven markets and extend the Group`s geographical reach.
Financial results
Group revenues increased by 14% to $2,44 billion (H1 FY11: $2,13 billion) with
33% of Group revenue generated from North America (H1 FY11: 35%), 34% from
Europe (H1 FY11: 37%), 13% from Asia Pacific (H1 FY11: 11%), 12% from Latin
America (H1 FY11: 10%) and 8% from AIME (H1 FY11: 7%).
Gross margins improved to 14,1% (H1 FY11: 13,2%). Gross profit increased by 22%
to $343,7 million (H1 FY11: $282,0 million), while operating costs increased at
a lower rate than gross profit by 16% to $258,3 million (H1 FY11: $222,3
million).
Accordingly, EBITDA increased 46% to $85,4 million (H1 FY11: $58,5 million),
which includes net unrealised foreign exchange gains of $0,5 million (H1 FY11:
$1,2 million losses). Depreciation was $11,6 million (H1 FY11:$10,3 million) and
amortisation of intangible fixed assets arising from acquisitions was $7,8
million (H1 FY11: $8,1 million).
Operating profit increased by 65% to $66,2 million (H1 FY11: $40,1 million). The
net interest charge increased to $5,9 million (H1 FY11: $4,3 million), as a
result of Westcon`s utilisation of prompt pay arrangements.
Profit before tax increased 109% to $60,7 million (H1 FY11: $29,0 million),
after fair value movements on put option liabilities.
The Group`s reported effective tax rate decreased to 34% from 41%. If the fair
value movements on put option liabilities are excluded from profit before tax,
the effective tax rate would have been 34% for both periods. The Group`s
effective tax rate is higher than the South African statutory tax rate of 28%,
primarily due to profits in jurisdictions with higher effective tax rates, most
notably North and South America.
The effective tax rate for the financial year ending 28 February 2012 (excluding
any fair value movements on put option liabilities) is expected to be
approximately 34%.
Underlying earnings per share increased by 38% to 21,8 US cents (H1 FY11: 15,8
US cents). Headline earnings per share ("HEPS") increased by 122% to 19,5 US
cents (H1 FY11: 8,8 US cents). HEPS, excluding the effect of put option fair
value adjustments increased by 56% to 19,5 US cents (H1 FY11: 12,5 US cents).
Consistent with the prior year, Westcon is taking advantage of vendor supplier
prompt pay initiatives, which are earnings enhancing. Amounts drawn under this
banking facility are disclosed under bank overdrafts, and form part of net
debt/cash.
The Group`s operations generated $17,0 million cash during the period (H1 FY11:
cash utilisation of $192,0 million).
The Group ended the period with net debt of $8,8 million (H1 FY11: $62,2
million), after deducting long-term debt of $19,1 million and short-term debt of
$8,6 million included in the payables and provisions line on the statement of
financial position. The Group continues to have comfortable head-room in terms
of its working capital lines.
The Group issued 188 070 new shares during the year to date with all the shares
issued to satisfy exercised share options.
The Group spent $48,9 million on acquisitions ($16,7 million cash and the
balance deferred). Goodwill and intangible assets attributable to these
acquisitions were $35,0 million and $12,5 million respectively. The revenue and
EBITDA included from these acquisitions for the first six months of the 2012
financial year were $14,3 million and $1,4 million respectively. Had the
acquisition dates been 1 March 2011, revenue attributable to these acquisitions
would have been approximately $19 million. It is not practical to establish the
EBITDA that would have been contributed by the acquisitions in 2012 if they had
been included from 1 March 2011.
A $45 million put option liability for Promon Logicalis Latin America Limited
("PLLAL") was previously recognised in accordance with IAS 32 Financial
Instruments: Presentation. Under IAS 39 Financial Instruments: Recognition and
Measurement, companies are required to re-measure such liabilities at each
reporting date, with changes in the fair values booked in the statement of
comprehensive income. This put option liability was reversed to reserves during
the first half of the year pursuant to the cancelation of the put option.
Gains of $17,4 million (H1 FY11: $1,9 million losses) arising on translation of
non-USD denominated subsidiaries are included in comprehensive income of $106
million (H1 FY11: $14 million).
DIVISIONAL REVIEWS
Westcon
Westcon accounted for 74% of the Group`s revenues and 68% of its EBITDA in the
six months to 31 August 2011.
Westcon is the world`s leading specialty distributor in networking, security,
mobility and convergence for leading technology vendors, including Cisco, Avaya,
Check Point, Bluecoat, Juniper Networks, F5, Microsoft, Polycom and other
complementary manufacturers. Through its Comstor, Westcon Convergence and
Westcon Security business units, Westcon sells products and services to
resellers, systems integrators and service providers. Westcon has particular
expertise in the convergence of voice, data and video applications and
technologies, including voice-over internet protocol ("VoIP"), security for
networking and communications systems, data centre technologies,
videoconferencing and wireless connectivity.
The solid financial performance reported by Westcon during the previous
financial year continued during the first half of the current financial year,
with both revenues and profitability showing an improvement over the Comparative
Period. Overall revenues increased 11% to $1,80 billion (H1 FY11: $1,62 billion)
with the best growth achieved in Asia Pacific, AIME (Africa, India and Middle
East) and Latin America. Trading in North America remained resilient, with a
particularly notable contribution from Canada.
From a geographic perspective, 35% of Westcon`s revenue was generated in North
America (H1 FY11: 36%), 34% in Europe
(H1 FY11: 38%), 14% in Asia Pacific (H1 FY11: 12%), 11% in AIME (H1 FY11: 9%)
and 6% in Latin America (H1 FY11: 5%).
Gross margins increased to 10,9% (H1 FY11: 9,8%) with increased margins in North
America, Latin America, Europe, and AIME. European gross margins improved from
9,5% to 11,5%. Overall gross margins also improved as a result of a more
favourable product mix which saw Cisco products make up 51% of Westcon`s revenue
(H1 FY11: 55%), 15% for Avaya/Nortel (H1 FY11: 16%), 20% for security (H1 FY11:
15%) and 14% for Affinity/other development vendors (H1 FY11: 14%).
Gross profit increased 23% to $195,4 million (H1 FY11: $159,4 million).
Operating expenses grew 13% to $131,6 million (H1 FY11: $116,4 million) due to
increased headcount levels and higher outbound freight expenses. Operating
expenses grew at a much lower rate than gross profit. As a result, Westcon`s
EBITDA increased 48% to $63,8 million (H1 FY11: $43,0 million) while EBITDA
margins increased to 3,6% (H1 FY11: 2,7%), with increased margins in North
America, Europe, Latin America and AIME offset by lower margins in Asia Pacific.
Operating profit increased 61% to $57,3 million (H1 FY11: $35,7 million).
Westcon continued its strong working capital management reducing its net debt
balance to $52 million (H1 FY11: $106 million).
Cloud computing and broadband wireless data proliferation are placing extra
demands on networking and security, which are areas on which Westcon focuses.
Management expects the operating leverage and margin expansion to continue as
growth is maintained.
Commencing next financial year, Westcon will transition its existing global ERP
system to a new platform. The upgrade is part of a program to improve and
optimise Westcon`s systems and infrastructure capabilities in support of its
growing business and increasing transaction volumes. The increase in capitalised
development expenditure in the balance sheet is attributable to this ERP system
transition.
Logicalis
Logicalis accounted for 25% of the Group`s revenues and 31% of its EBITDA in the
six months to 31 August 2011.
Logicalis is an international IT solutions and services provider with a breadth
of knowledge and expertise in IT infrastructure and networking solutions,
communications and collaboration, data centre, cloud and professional and
managed services.
The performance in the first half of the financial year has been very good with
double digit growth in all regions with the exception of the US where demand has
been softer. Growth has been particularly strong in South America and Asia
Pacific and the performance in the UK was on target despite a weak macroeconomic
environment. The South America region continued to benefit from the increased
capital investment by the telecommunication service providers.
Revenue increased by 26% to $602,2 million (H1 FY11: $479,2 million), including
the benefit of $14,3 million revenue from the two acquisitions made in the first
half. Organic revenue increased by 20%, reflecting the strong growth in the
South America and Asia Pacific markets.
Revenue from product sales was up 23%, with strong increases in the Cisco and HP
vendor categories and revenues from total services were up 34%, with strong
growth in annuity service revenues of 38%.
The gross margin was slightly lower at 22,4% (H1 FY11: 23,1%). Both product and
services margins were down slightly. The gross profit was $135,0 million (H1
FY11: $110,7 million).
Operating expenses growth was 19%, which is lower than the revenue and gross
profit growth, delivering the planned improvement in operational leverage.
EBITDA increased 34% to $29,2 million (H1 FY11: $21,8 million), resulting in an
EBITDA margin of 4,8% (H1 FY11: 4,5%).
After charges for depreciation and amortisation of intangible assets, operating
profit was up 52% to $17,3 million (H1 FY11:
$11,4 million).
During the first half of the financial year Logicalis completed two acquisitions
to consolidate its position in the UK and USA respectively.
On 31 August, Logicalis sold 10% of the shareholding in PLLAL to its partner in
Latin America, Promon SA. Logicalis first partnered with Promon in May 2008 and
formed PLLAL to develop its existing Latin American business. Since then the
business has gone from strength to strength. Promon has now committed to the
long-term future of PLLAL by acquiring a further 10% interest in the business
for $15 million in cash, increasing its share of the business to 40%. As a
result Datatec`s equity ownership of PLLAL through Logicalis will reduce to 60%,
with effect from 31 August 2011.
Although the US and UK markets continue to be challenging, management expects
that the overall performance in the second half will be sequentially and
comparatively better.
Consulting Services
The Consulting Services division, comprising the majority-owned businesses
Analysys Mason and Intact and an equity stake in Via Group and Cornwall Energy,
accounted for 1% of Group revenues and 1% of EBITDA in the six months to 31
August 2011.
Analysys Mason delivers management consulting, advisory, modelling and market
intelligence services to the telecoms, IT and digital media industries. The
company`s clients include telecoms operators, financial institutions, media
organisations, regulators and a range of other public sector bodies.
Intact is a services and support consultancy delivering high end professional
services in networking, unified communications, security, wireless and data
centre technologies. Intact`s services are offered exclusively through its
partner network, which includes value added resellers, systems integrators,
network integrators and service providers.
Revenues increased by 11% to $38,7 million (H1 FY11: $34,7 million) with
increased revenues from Europe and the Americas offsetting reduced demand from
the UK, MENA and Asia.
Better utilisation of consultants helped to deliver a 22% increase in EBITDA to
$1,3 million (H1 FY11: $1,0 million).
Following the significant changes of the last couple of years, the management
will continue to consolidate the improved operating models and look for
opportunities to enhance the division`s portfolio. The current backlog is
encouraging and, whilst wary of the prevailing concerns around the global
economy, the management is cautiously optimistic for the second half.
Corporate
Corporate encompasses the net operating costs of the Datatec head office
entities of $8,9 million (H1 FY11: $6,9 million) and unrealised gains of $0,1
million and immaterial realised exchanges losses (H1 FY11: $0,1 million
unrealised and $0,3 million realised exchange losses). Head office costs are
higher due to an increased marketing campaign in support of our 25th year
anniversary and raising our international visibility.
Reporting
This interim report complies with International Accounting Standard 34 - Interim
Financial Reporting, the South African Statements and Interpretations of
Statements of Generally Accepted Accounting Practice (AC 500 Series), the
requirements of the Companies Act of South Africa, the AIM Rules for Companies
and the disclosure requirements of the JSE Limited`s Listings Requirements. The
accounting policies comply with International Financial Reporting Standards
("IFRS") of the International Accounting Standards Board and are consistent with
those applied in the prior year financial statements. The preparation of the
Group`s consolidated interim results for the six months ended 31 August 2011 was
supervised by the Chief Financial Officer, Mr I Dittrich. The financial
information has not been audited or reviewed by Deloitte & Touche.
Current trading and prospects
The Group is cautiously optimistic about its financial performance in the second
half of the year, despite the current bout of poor economic data, sovereign
indebtedness issues and still weak consumer markets. Innovations in technology,
such as cloud services, are helping to drive growth in many ICT segments. Our
industry remains well underpinned by the continued growth of internet usage and
the Group is geographically well balanced.
On 11 May 2011 the Group published a forecast for the 2012 financial year of
revenues of between $4,8 billion and $5,1 billion, profit after tax** of
approximately $84 million, underlying* earnings per share of approximately 47 US
cents and both earnings** per share and headline** earnings per share of
approximately 42 US cents. Based on current trading conditions and exchange
rates, these earnings and profit forecasts remain unchanged and the Group now
expects revenues of approximately $5 billion for the 2012 financial year. The
financial information on which this forecast is based has not been reviewed and
reported on by Datatec`s external auditors.
Dividend/capital distribution policy
The Group`s dividend/capital distribution payment policy has been amended from
making a single annual payment to making both an interim and final distribution.
The dividend cover policy of at least three times relative to underlying*
earnings per share will apply to both interim and final distributions.
Interim cash distribution by way of capital reduction
The Group will distribute to shareholders an interim capital reduction out of
share premium in lieu of a dividend, of 56 RSA cents per share (approximately 7
US cents per share) for the six months ended 31 August 2011. The capital
distribution will be paid to shareholders on the Jersey branch register in
pounds sterling translated at the closing exchange rate on Wednesday, 23
November 2011.
The salient dates will be as follows:
Last day to trade Friday, 18 November 2011
Shares to commence trading
ex the distribution Monday, 21 November 2011
Record date Friday, 25 November 2011
Payment date Monday, 28 November 2011
Share certificates may not be dematerialised or rematerialised between Monday,
21 November 2011 and Friday, 25 November 2011, both days inclusive.
On behalf of the Board
SJ Davidson JP Montanana IP Dittrich
Chairman Chief Executive Officer Chief Financial Officer
12 October 2011
*Excluding goodwill and intangibles impairment, amortisation of acquired
intangible assets, acquisition related adjustments, profit or loss on sale of
assets and businesses, fair value movements on acquisition related financial
instruments and unrealised foreign exchange movements.
**Forecasts for profit after tax, earnings per share and headline earnings per
share do not take into account any fair value gains or losses on acquisition
related financial instruments (including put option liabilities), which are
required under IFRS.
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months to 31 August 2011
Unaudited Unaudited Audited
six months six months year
to to ended
August August February
USD`000 2011 2010 2011
Revenue 2 437 813 2 132 992 4 302 972
Continuing operations 2 423 561 2 132 616 4 293 955
Acquisitions 14 252 376 9 017
Cost of sales (2 094 071) (1 851 038) (3 705 417)
Gross profit 343 742 281 954 597 555
Operating costs (258 897) (222 265) (454 949)
Unrealised foreign exchange 543 (1 235) (425)
gains/(losses)
Operating profit before 85 388 58 454 142 181
finance costs, depreciation
and amortisation ("EBITDA")
Depreciation (11 587) (10 290) (21 045)
Amortisation of acquired (7 797) (8 070) (16 160)
intangible assets
Operating profit before 66 004 40 094 104 976
acquisition related
adjustment
Acquisition related 240 - -
adjustment
Operating profit 66 244 40 094 104 976
Interest income 3 726 2 178 6 030
Financing costs (9 667) (6 435) (16 210)
Fair value movements on put 83 (6 797) (14 701)
option liabilities
Share of equity accounted 284 (66) 118
investment profits/(losses)
Loss on disposal of - - (2 035)
investments
Profit before taxation 60 670 28 974 78 178
Taxation (20 842) (11 976) (32 238)
Profit for the year 39 828 16 998 45 940
Other comprehensive income: 17 387 (1 898) 32 399
Translation of foreign
subsidiaries
Translation of equity loans (176) (1 474) (2 732)
net of tax effect
Derecognition of put option 45 000 - -
liability
Other items 4 253 402 809
Total comprehensive income 106 292 14 028 76 416
for the year
Profit attributable to:
Owners of the parent 36 382 16 064 41 893
Non-controlling interest 3 446 934 4 047
39 828 16 998 45 940
Total comprehensive income
attributable to:
Owners of the parent 101 590 12 224 70 346
Non-controlling interest 4 702 1 804 6 070
106 292 14 028 76 416
Number of shares issued
(millions)
Issued 186 185 186
Weighted average 186 183 184
Diluted weighted average 189 186 187
Earnings per share ("EPS")
(US cents)
Basic EPS 19,6 8,8 22,8
Diluted basic EPS 19,3 8,7 22,4
SALIENT FINANCIAL FEATURES
Headline earnings 36 289 16 116 44 020
Headline earnings per share
(US cents)
?Headline 19,5 8,8 23,9
?Diluted headline 19,2 8,7 23,5
Underlying earnings 40 548 28 935 69 705
Underlying earnings per
share (US cents)
?Underlying 21,8 15,8 37,9
?Diluted underlying 21,5 15,6 37,3
Net asset value per share 438,6 361,2 392,1
(US cents)
KEY RATIOS
Gross margin (%) 14,1 13,2 13,9
EBITDA (%) 3,5 2,7 3,3
Effective tax rate (%) 34,4 41,3 41,2
Effective tax rate (%) 34,4 33,5 34,7
excluding fair value
movements on put option
liabilities
Exchange rates
Average Rand/USD exchange 6,8 7,5 7,2
rate
Closing Rand/USD exchange 7,0 7,4 7,0
rate
CONDENSED GROUP STATEMENT OF CASH FLOWS
for the six months to 31 August 2011
Unaudited Unaudited Audited
six months six months year
to to ended
August August February
USD`000 2011 2010 2011
EBITDA 85 388 58 454 142 181
(Profit)/loss on disposal of (151) 79 67
property, plant and
equipment
Non-cash items 7 073 7 147 (1 172)
Cash generated before 92 310 65 680 141 076
working capital changes
Working capital changes (75 306) (257 752) (205 106)
Increase in inventories (63 781) (38 375) (11 051)
Increase in receivables (184 575) (114 894) (80 441)
Increase/(decrease) in 173 050 (104 483) (113 614)
payables
Cash generated from/ 17 004 (192 072) (64 030)
(utilised by) operations
Net finance costs paid (5 941) (4 257) (10 180)
Taxation paid (27 072) (13 025) (26 687)
Net cash outflow from (16 009) (209 354) (100 897)
operating activities
Investment in subsidiaries (16 746) (111) (14 705)
Net cash outflow from other (20 082) (15 999) (31 295)
investing activities
Proceeds on disposal of 15 000 - -
partial interest in a
subsidiary that does not
involve a loss in control
Net cash (outflow)/inflow (6 135) (23 075) 6 677
from other financing
activities
Capital distribution to (24 164) (21 713) (21 713)
shareholders
Net decrease in cash and (68 136) (270 252) (161 933)
cash equivalents
Cash and cash equivalents at 83 219 239 834 239 834
the beginning of year
Translation differences on 3 836 (305) 5 318
opening cash position
Cash and cash equivalents at 18 919 (30 723) 83 219
the end of year
Comprises cash resources, net of bank overdrafts and trade finance advances.
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
as at 31 August 2011
Unaudited Unaudited Audited
six months six months year
to to ended
USD`000 August August February
2011 2010 2011
ASSETS
Non-current assets 572 098 457 344 515 590
Property, plant and 55 404 47 062 52 915
equipment
Capitalised development 24 882 14 108 15 570
expenditure
Goodwill 375 437 316 160 338 320
Acquired intangible assets 48 184 43 401 43 796
Investments 8 260 6 738 7 914
Deferred taxation assets 36 123 29 875 35 966
Other receivables and 23 808 - 21 109
prepayments
Current assets 1 751 598 1 455 136 1 481 342
Inventories 367 082 316 563 299 460
Trade and other receivables 1 139 406 953 758 944 230
Cash and cash equivalents 245 110 184 815 237 652
Total assets 2 323 696 1 912 480 1 996 932
EQUITY AND LIABILITIES
Ordinary shareholders` funds 814 843 666 609 727 702
Non-controlling interest 54 820 51 923 42 677
Total equity 869 663 718 532 770 379
Non-current liabilities 79 709 79 766 97 463
Long-term liabilities 19 096 19 598 21 171
Amounts owing to vendors 8 534 23 356 26 353
Liability for share-based 17 750 11 491 15 828
payments
Deferred taxation 34 329 25 321 34 111
liabilities
Current liabilities 1 374 324 1 114 182 1 129 090
Payables and provisions 1 118 951 863 692 928 866
Amounts owing to vendors 26 060 27 202 33 132
Taxation 3 122 7 750 12 659
Bank overdrafts 226 191 215 538 154 433
Total equity and liabilities 2 323 696 1 912 480 1 996 932
Capital expenditure incurred
in the period
(including capitalised 20 584 15 868 30 610
development expenditure)
Capital commitments in the 26 521 12 329 23 160
period
Lease commitments in the 92 748 86 188 93 412
period
Payable within one year 25 689 20 013 22 858
Payable after one year 67 059 66 175 70 554
CONDENSED GROUP STATEMENT OF CHANGES IN TOTAL EQUITY
for the six months to 31 August 2011
Unaudited Unaudited Audited
six months six months year
to to ended
August August February
USD`000 2011 2010 2011
Balance at beginning of year 770 379 718 779 718 779
Total comprehensive income 106 292 14 028 76 416
New share issues 293 9 036 13 694
Capital distribution to (24 164) (21 713) (21 713)
shareholders
Share-based payments (578) (617) 277
Shares contingently issuable 10 000 - -
related to acquisitions
Acquisitions - (200) (2 781)
Non-controlling interest 7 441 (781) (14 293)
Balance at end of year 869 663 718 532 770 379
DETERMINATION OF HEADLINE AND UNDERLYING EARNINGS
for the six months to 31 August 2011
Unaudited Unaudited Audited
six months six months year
to to ended
August August February
USD`000 2011 2010 2011
Profit attributable to 36 382 16 064 41 893
equity holders of the parent
Headline earnings
adjustments
(Profit)/loss on disposal of (151) 79 2 103
property, plant and
equipment and investments
?Tax effect 51 (27) 24
?Non-controlling interest 7 - -
Headline earnings 36 289 16 116 44 020
DETERMINATION OF UNDERLYING
EARNINGS
Underlying earnings 6 931 16 102 31 286
adjustments
Unrealised foreign exchange (543) 1 235 425
(losses)/gains
Fair value movements on put (83) 6 797 14 701
option arrangements
Acquisition related (240) - -
adjustment
Amortisation of intangible 7 797 8 070 16 160
assets
?Tax effect (2 654) (3 129) (5 559)
?Non-controlling interest (18) (154) (42)
Underlying earnings 40 548 28 935 69 705
SEGMENTAL ANALYSIS
for the six months to 31 August 2011
Unaudited Unaudited Audited
six months six months year
to to ended
USD`000 August August February
2011 2010 2011
Revenue
Westcon 1 796 986 1 619 130 3 184
042
Logicalis 602 172 479 160 1 046 422
Consulting Services 38 655 34 702 72 508
Revenue 2 437 813 2 132 992 4 302
972
EBITDA
Westcon 63 819 43 067 105 328
Logicalis 29 163 21 768 53 032
Consulting Services 1 263 1 032 541
Corporate (8 857) (7 413) (16 720)
EBITDA 85 388 58 454 142 181
Operating profit
Westcon 57 280 35 755 91 277
Logicalis 17 328 11 369 31 340
Consulting Services 572 461 (764)
Corporate (8 936) (7 491) (16 877)
Operating profit 66 244 40 094 104 976
Total assets
Westcon 1 468 057 1 233 850 1 284
221
Logicalis 788 465 612 779 641 912
Consulting Services 50 129 54 834 48 554
Corporate 17 045 11 017 22 245
Total assets 2 323 696 1 912 480 1 996 932
Directors
SJ Davidson*# (Chairman), JP Montanana# (CEO), IP Dittrich (CFO), O Ighodaro, JF
McCartney+*, LW Nkuhlu*, CS Seabrooke*, NJ Temple*# #British
*Non-executive +American Nigerian
www.datatec-group.com
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 12/10/2011 08:00:01 Produced by the JSE SENS Department.
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