| Tue 15 May 2001, 0:00 | | Dimension Data Holdings Plc |
|
Dimension Data Holdings plc
Unaudited Interim Results
Six Months ended 31 March 2001
Dimension Data Holdings plc ("Dimension Data" or the "Group"), the leading
global network services and interactive commerce (i-Commerce) solutions
Group, announces strong global progress in its results for the six months
ended 31 March 2001.
Financial Highlights
* Total turnover increased by 50% to $1,225.2 million (1H 2000: $814.9
million)
* Total operating profit before goodwill amortisation up by 40% to $122.0
million (1H 2000: $86.9 million)
* Profit on ordinary activities before goodwill amortisation and exceptional
items grew by 68% to $159.6 million (1H 2000: $95.1 million)
* Weighted average number of shares in issue increased by 61% to 1,212
million (1H 2000: 754 million) and basic earnings per share before goodwill
amortisation and exceptional items up by 29% to 8.4 cents (1H 2000: 6.5
cents)
* Net cash inflow from operating activities of $43.0 million (1H 2000: $51.4
million)
Geographical analysis
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2001 31 March 2000 30 September 2000
$000's Turnover Operating Turnover Operating Turnover
Operating
Profit * Profit * Profit *
Africa 223,166 43,620 188,701 43,396 416,631 85,703
Asia 291,437 28,713 211,453 21,186 472,209 46,442
Australia 203,105 11,891 170,884 8,528 408,731 22,489
Continental
Europe 191,092 16,709 29,621 1,765 199,252 16,487
UK 140,036 18,871 163,249 19,243 311,126 30,051
US 143,514 9,221 34,053 2,329 124,423 9,234
1,192,350 129,025 797,961 96,447 1,932,372 210,406
Other
Africa** 7,741 (9,241) 197 (9,479) 10,204 (56)
1,200,091 119,784 798,158 86,968 1,942,576 210,350
Associates 25,107 2,232 16,719 (22) 33,922 1,999
1,225,198 122,016 814,877 86,946 1,976,498 212,349
* before goodwill amortisation
** comprises Investment holding and management and Protocol
Currency
The following table reflects the average and period end exchange rates
against the US dollar of SA Rand, Australian Dollar, Sterling and Euro:
Six months ended Six months ended Year ended
31 March 2001 31 March 2000 30 September
2000
Currency Average Period Average Period Average
Period
end end
end
South African
Rand 7.699 8.005 6.429 6.560 6.772
7.300
Australian
Dollar 1.902 2.051 1.603 1.607 1.702
1.842
Sterling 0.687 0.701 0.624 0.625 0.651
0.683
Euro 1.114 1.130 0.996 1.044 1.072
1.135
Highlights
* Positive endorsement of Dimension Data's move to introduce a new category
of systems integrator offering multichannel connectivity and total
integration from infrastructure and network services to e-business strategy.
* Substantial progress with the integration of European businesses into a
pan-European Network Services provider.
* Further penetration of the US market with the acquisitions of Timebridge
Technologies, Premier Systems Integrators and Matrix Networking Group.
* Increased profile building activities, strengthening Dimension Data's
positioning as a global brand.
* Continued rollout of Global Services Operating Architecture (GSOA),
ongoing development of new services including security and contact centres
and the rapid integration of the GSOA into new acquisitions.
* Launched integrated Business and Operations Support Systems (iBOSS) as
part of the GSOA offerings.
Commenting on the results, Jeremy Ord, Executive Chairman said: "Dimension
Data has been able to deliver good organic growth despite evidence of a
slowing global economy. This is due to the Group's global capability,
differentiated positioning and our customers' increasing recognition of the
strategic importance of the network which is fuelling continued growth in
demand for managed services. Global demand for robust communications
infrastructures is being enhanced by a need for managed services to deliver
high infrastructure and application uptime and to manage and integrate
multiple technology channels.
In the past six months the Group made further progress toward realising its
vision of becoming the first of a new category of systems integrators with
competence in both connectivity and integration. Dimension Data's focus on
providing the building blocks that support and enable e-commerce, positions
it well to capitalise on two of the fastest growing technology sectors -
Network Services and e-business application integration. The global rollout
of a consistently defined and branded range of leading edge service
offerings, combined with the rebranding of regional business units under the
Dimension Data brand, has started to yield positive results in terms of the
Group's ability to attract new regional and multi-national customers.
Sentiment around the IT services environment has, in recent months, been
impacted by increasing uncertainty around the reduction in Telco capex
spending, retrenchments and stock write downs in a number of the large
technology vendors. We nevertheless remain confident that Dimension Data's
unique differentiated business model positions it in markets where the
consequences of these trends are diluted, and believe that the Group's
prospects and pipeline for the majority of our businesses going into the
second half of the year, remain sound."
Enquiries:
Dimension Data Holdings plc
Jeremy Ord, Executive Chairman
Malcolm Rutherford, Group Financial Director
Richard Came, Group Strategy and Marketing Director
Karen Cramer, Investor Relations
On the day: +(44) 793 2020 296
Thereafter: +(44) 207 659 1600
Internet address: www.didata.com
Financial Dynamics
Giles Sanderson
James Melville-Ross +(44) 20 7831 3113
Note:
All references to $ are to US$
1H 2000 refers to the six months ended 31 March 2000
1H 2001 refers to the six months ended 31 March 2001
2H 2001 refers to the six months ending on 30 September 2001
FINANCIAL REVIEW
Introduction
Notwithstanding the strengthening of the dollar, which has been a factor
that has impacted the results, in the majority of businesses, growth on a
currency adjusted and organic basis has been strong.
Turnover
Total turnover including associates grew by 50% from $815 million to $1,225
million, reflecting a combination of high organic growth and the impact of
acquisitions in the US and Europe. Turnover in continuing operations grew by
43%. The acquisitions of Timebridge, Netpartner and Linx Holdings in the
current year contributed $59 million to turnover. In addition, there was a
six month contribution of $191 million from Dimension Data Europe (formerly
Comparex) against only one month in the comparable period. Revenue from
associate companies increased to $25 million.
Organic turnover growth in constant currency terms was 34%, reflecting the
increase in demand for the Group's offerings from new and existing clients,
and good market share gains in the Network Services division in most
geographies.
Operating profit before goodwill amortisation
Group operating profit before goodwill amortisation increased by 38% from
$87 million to $120 million. Organic operating profit, in constant currency
terms (including associates) grew by 28%. The operating margin in 1H 2001 is
10.0% compared to 10.9% in 1H 2000 reflecting the full period consolidation
of the lower margin European and US Network Services businesses, as well as
the impact of lower margins in the i-Commerce division. Network Services
operating margins in all regions with the exception of Africa and the US
were stable or improved. The margins benefited from an increasing
contribution from higher value added Network Services revenue in the
business mix and from an extension in the lines of business needed to
complete our networking offerings.
Goodwill amortisation
Goodwill amortisation amounted to $277 million in 1H 2001 compared to $71
million in 1H 2000. The increase can largely be attributed to the
acquisition of Dimension Data Europe, effective 29 February 2000, which
resulted in a significant goodwill balance and consequent amortisation
charge.
Exceptional items
Exceptional items comprise the profit on the disposal of a 40% share in The
Internet Solution.
Net interest receivable
Net interest receivable has increased from $5 million in 1H 2000 to $36
million in 1H 2001 in line with the accumulation of cash resources generated
by the Group's day to day operations and the cash remaining from the Global
Offer in July 2000.
Profit on ordinary activities
Profit on ordinary activities before taxation, goodwill amortisation and
exceptional items was $160 million (1H 2000: $95 million), an increase of
68%.
Taxation
The Group's effective tax rate (after adding back amortisation of goodwill
and exceptional items) was 26.5% in 1H 2001 compared to 28.5% in 1H 2000.
The reduction in the Group's effective tax rate has resulted from the tax
efficient investment of the Group's cash resources as well as a low
effective tax rate in Continental Europe.
Equity minority interests
The profit attributable to equity minority interests decreased by 16% to $16
million in 1H 2001 (1H 2000: $19 million), reflecting the buy out of
minorities in Australia and the United Kingdom as well as the roll up of
Nedcor's shareholding in Dimension Data International to Dimension Data
Holdings plc.
Earnings per share
Earnings per share before goodwill amortisation and exceptional items
increased by 29% to 8.4 US cents. The Group was obliged to restate its 31
March 2000 earnings per share before goodwill amortisation and exceptional
items to take into account the effects of the 1999 capitalisation award.
This had the effect of reducing the reported 31 March 2000 earnings per
share before goodwill amortisation and exceptional items from 6.6 US cents
to 6.5 US cents.
Cashflow
The Group's net cash inflow from operating activities was $43 million in 1H
2001 compared to $51 million in 1H 2000. This decrease came about as a
result of a reduction in trade creditors' days which more than offset the
improvement in debtors' days. The Group's working capital has been financed
through internally generated cash and acquisitions have been financed mainly
by cash.
The Group's capital expenditure and financial investment cash inflow was $31
million for 1H 2001 compared to an outflow of $28 million in 1H 2000
primarily as a result of the proceeds on the sale of 40% of The Internet
Solution.
OPERATIONAL REVIEW
Network Services
The Network Services division generated revenue of $1,064 million. The key
area of focus of the division is the identification and supply of
specialised value-added network services to enterprise customers, multi-
national corporations and service providers. The division's ability to
supply such services on a global basis was enhanced by the establishment of
a presence in the two largest global IT services markets, the US and Europe.
The Network Services division achieved strong organic revenue growth in most
regions. The margin trends in the individual regions were largely positive
but the overall margin was negatively impacted by the consolidation of the
lower margin US and European acquisitions.
Continued progress was made with the rollout of the GSOA. Operations centres
were opened in Frankfurt, London and Washington as well as satellite centres
in Boston, New York, Brussels, Paris, Stockholm, Lausanne, Milan, Amsterdam,
Hong Kong, India, Korea and Japan. All operating centres and satellites are
now linked on a common global network enabling 24x7x365 real time, on-line
managed services.
The business has been reorganised where appropriate along key technology
Lines of Business in order to streamline the interface with the customer and
enable Dimension Data to provide end-to-end solutions in the most efficient
and effective way. The key lines of business are:
* Multiservice Networking
* Advanced Infrastructure
* Interactive Communications
* Enterprise Systems
These areas are underpinned by the GSOA, which allows Dimension Data to
support and manage networks on-line in order to function in an integrated
manner.
The division continues to view product fulfilment as an integral and
leveragable part of its business model. The trend of technology vendors to
become increasingly reliant on integrators as technology environments become
more complex continued and there is evidence that, in tough economic times,
our customers are increasingly considering outsourcing models. The Group
continued to work closely with the principal technology partners including,
amongst others, Cisco, Nortel, Lucent, Avici, Juniper, Sun, Microsoft and
Checkpoint. A new technology partnership was signed with Orchestream, a
global leader in the development of software for activating services and
enhancing the performance of Internet Protocol (IP) networks.
Skills remain crucial to the success of the Group. Our ability to attract
and retain staff across the Group improved as a result of Dimension Data's
differentiated global positioning as well as a less competitive recruitment
market.
i-Commerce
i-Commerce offers total interactive commercial solutions, including
application and integration services with core capabilities in consolidating
interactive channels between enterprises and their customers, suppliers and
partners, and connecting these channels to the back office.
The division's performance was negatively impacted by the fall off in the
dot.com market in Australia, longer sales cycles and under-utilisation of
capacity in the UK and South Africa.
The Group remains committed to its strategy of developing the business to be
able to address our customers' emerging requirement for integrated
networking and software solutions. We will continue to position the Group to
benefit from the long term trend of a shift from pure e-commerce
integrators, to suppliers with the ability to integrate multiple channels
and back end environments.
Dimension Data launched iBOSS globally during the review period. iBOSS is a
portfolio of software and services designed to help service providers
rapidly implement new internet-based services and manage them effectively.
Dimension Data continued to work closely with the principal technology
partners including amongst others Siebel, Neon, Vignette, Genesys, Software
AG and Oracle.
Regional Review
Africa
Overall revenue from Dimension Data's African operations increased by 18% to
$223 million (1H 2000: $189 million) which in currency adjusted terms
equates to growth of 42%. The performance within Africa was, however mixed.
Strong growth in revenue in Network Services and i-Commerce was offset by
the profit performance from the i-Commerce business.
The African Network Services operations once again produced strong organic
growth of 50% in currency adjusted terms. This was driven by our ability to
deliver a broad range of solutions and services into our existing customer
base and continued demand from customers particularly in the mobile operator
and financial services sectors. High margins were achieved evidencing our
strong market position, all encompassing range of network services and
highly evolved services model.
The reorganisation into key lines of business has provided greater focus and
the ability to streamline the interface with the customer. Demand for our
managed on-line services offering to GSOA continued to be robust. In the
Telco space, the launch of iBOSS placed us in a strong position to continue
to win services out of this high growth market segment. Enterprise systems
(including high-end servers and storage), provided as part of an integrated
Network Services and i-Commerce offering, were a key growth area. There is
good visibility going into 2H 2001.
Revenue growth in the South African i-Commerce business was disappointing in
dollar terms. In local currency however, growth of 25% was achieved,
representing a strong performance in relation to traditional industry
benchmarks notwithstanding utilisations that were lower than previous
periods. Growth remained robust in the e-business integration services and
contact centre businesses, but overall revenue growth was impacted by a
delay in concluding a number of large contracts for the supply and
integration of software applications.
A number of contracts that were not concluded in the first half of the year
are expected to materialise in the second half.
Asia
Datacraft, the Group's Asian operation, maintained its unbroken record of
high growth. The business benefited from continued buoyant demand for
telecommunications and internet equipment services. Turnover grew by 38% to
$291 million (1H 2000: $211 million). The feature of the period under review
was the continued strong demand for services as customers increasingly look
to outsource their network requirements. High growth areas were India,
Singapore and Hong Kong. Despite the sluggish local economy in Japan, the
company continued to grow strongly there due to penetration of two lucrative
new market areas, namely overseas multi-national corporations operating in
Japan and Japanese multi-nationals operating throughout Asia. De-regulation
continues to drive investment by new telecom licensees and ex-monopolies
investing in upgrading their networks to maintain growth and competitive
position. Datacraft remains confident about market potential under difficult
global market conditions due to the way in which they are rolling out
services. The pan-Asian company's positioning relative to its competitors
continues to benefit from their extensive regional infrastructure and the
strong focus on the delivery of services.
Australia
Dimension Data's Australian business increased revenue by 19% to $203
million (1H 2000: $171 million) which in currency adjusted terms equates to
growth of 41%. Market share gains drove strong growth in revenue and
improved margins in the Network Services and distribution businesses.
Dimension Data continued to enjoy large customer wins including significant
business in the establishment of contact centre environments where the
business has built up core expertise.
The strong performance in the Australian Network Services business was
somewhat offset by a decline in revenue in the web development division of
the i-Commerce business. This was caused by the fall off in business from
the dot.com market segment, which represented a significant percentage of
revenue in 1H 2000. The commensurate underutilisation of capacity resulted
in a reduced profit contribution. Management is aggressively focusing on
improving utilisation rates and foresees improved profitability in the
second half of the year.
Europe
Dimension Data Europe produced a pleasing performance, reporting revenue of
$191 million (1H 2000: $30 million) and an improved operating margin
relative to the prior reporting period. The highlights of the period include
increased market share in the multiservice networking space in Germany,
France, Belgium, Italy and Switzerland, quality customer wins amongst
European multi-national corporations and the rollout of GSOA capabilities
through the opening of the Frankfurt operations centre and satellite centres
in Brussels, Paris, Stockholm, Lausanne, Milan and Amsterdam.
The outlook for the second half of the year is cautiously optimistic. In
Germany, which was behind budget in 1H 2001, management changes have been
affected and a more aggressive services-led approach has been implemented.
The focus is on building Europe Central and Germany organically and through
acquisitions by augmenting existing multiservice networking capabilities
with additional lines of business.
Dimension Data Europe is well positioned through its pan-European and global
footprint complemented by its GSOA offering, to continue to gain market
share in the fragmented European market place.
United Kingdom
Revenue in Dimension Data's UK operations declined to $140 million (1H 2000
$163 million). If revenue from the discontinued operations in GK
Communications is stripped out of the prior period, revenue increased by 2%
in constant currency terms.
Top line growth in Dimension Data Network Services declined as a result of
longer sales cycles and a strategy of focusing on GSOA services and higher
margin technology service sales. In constant currency terms, excluding GK
Communications, revenue increased marginally. The operating margin improved
to 17.4%. There were a number of large opportunities that were not concluded
in the first half but have been carried over into the second half. The
strong pipeline is supporting an expectation for a significantly better
revenue growth in this period and for overall growth for the full year.
Dimension Data Network Services is also expected to start reaping the
benefits from the investment that has been made in setting up the GSOA and
from the introduction of new elements of Dimension Data's global model. This
has facilitated a much more focused sales approach and an improved ability
to sell more services into our existing customer base.
Revenue in the Group's UK managed contact centre business, The Merchants
Group declined by 5% to $46 million (1H 2000: $48 million). In currency
adjusted terms however, revenue increased by 5%.
USA
Progress was made during the reporting period in integrating the three
Network Services businesses acquired in the US over the past 18 months. Post
the reporting period, Dimension Data continued to build its presence in the
US Networking Services market through two further acquisitions, both in
Charlotte, North Carolina, providing a footprint in the South East. The US
operations have been consolidated into one US business with regional MD's
reporting into a US CEO, Bill Strang. The new structure is expected to
result in greater synergies in terms of the go-to-market approach and sales
effort as well as a lower overhead cost structure.
The US businesses reported revenue of $144 million compared to $34 million
in 1H 2000, reflecting both organic growth and acquisitions of DCS, ISG and
Timebridge. Using proforma results to reflect the pre-acquisition trading in
1H 2000, organic growth of approximately 15% has been achieved. Overall
market conditions and demand have deteriorated in the past six months and
there have been mixed performances out of the different regions. Trading in
the Boston businesses (ex ReCom and DCS) was impacted by a sharp decline in
demand from dot.com customers with whom they had done significant business
in the prior period. In contrast the New York operation (ISG) delivered
strong growth and achieved market share gains, leveraging off the Dimension
Data brand and global footprint as well as their newly launched GSOA
capabilities. Whilst trading was not as robust in our Washington operations
(Timebridge), good organic revenue growth was nevertheless achieved.
Market conditions in the US remain uncertain going into the second half of
the year but there is evidence that capital spending cycles are improving.
We are confident that the Group's differentiated position in a fragmented
market, our newly acquired Enterprise Systems and application management
capabilities, combined with a more aggressive focus on marketing our GSOA
capabilities, will allow us to achieve market share gains and deliver good
organic growth for the full year. The migration of the business model to
incorporate a greater proportion of higher value added services should
impact positively on margins.
PROXICOM ACQUISITION
On 11 May 2001 Dimension Data and Proxicom, Inc. announced that they had
entered into a definitive merger agreement in which Dimension Data will
commence a tender offer for all of the outstanding shares of Proxicom.
Proxicom's shareholders will receive $7.50 in cash for each share of
Proxicom stock they own. The aggregate purchase price is $448 million or
$378 million taking into account cash on the balance sheet as of 31 March
2001 and without giving effect to the payment of the break-up fee to Compaq.
Proxicom will operate as a subsidiary of Dimension Data.
Proxicom, Inc. is a leading e-business consulting and development company
that delivers innovative Internet and multi-channel solutions for Fortune
500 companies and other global businesses. The company's approximately 1,000
strategy, creative and technology professionals provide specialised e-
business development expertise.
Under the terms of the merger agreement, Dimension Data will promptly
commence a tender offer for all outstanding shares of Proxicom. Any Proxicom
shares not acquired by Dimension Data will be acquired in a subsequent
merger. The tender offer and merger are subject to customary closing
conditions and governmental approvals. The merger agreement is not subject
to any financing condition. The acquisition has been approved by the board
of directors of each company. Proxicom's Chairman and CEO, Raul Fernandez
and General Atlantic Partners, have agreed to support the transaction and
tender their shares pursuant to the offer.
Members of the senior management team have signed employment contracts with
Dimension Data. Dimension Data plans to retain the talent and employees of
Proxicom and incentivise them accordingly to ensure a successful
acquisition.
PROSPECTS
Prospects based on the pipeline going into the second half of the year
remain good, although market adoption rates are less predictable.
A strong drive to sell high level GSOA services into our existing customer
base as part of the ongoing drive to increase the overall services mix of
sales, is expected to result in widening margins in the Network Services
business. Steps have been taken to counteract the negative impact on
profitability of under-utilised capacity in the i-Commerce business. This,
combined with a close focus on costs, is expected to reverse the trend in
declining margins seen across the i-Commerce businesses in the first half of
the year.
The acquisition of the US enterprise and network services businesses,
Premier Systems Integrators and Matrix Networking Group, enhanced our
presence in the US. We have now established a comprehensive position on the
East Coast and added skills and solutions in the high growth sectors such as
applications management, storage networking and content delivery
environment. We plan to expand our presence further in the parts of the US,
Europe and Asia we do not yet have a comprehensive footprint in order to be
in a position to continue to attract new global customers.
The emerging requirement of our customers across the globe for integrated
network infrastructure and application solutions has motivated us to enter
into a definitive merger agreement with Proxicom Inc. We believe that with
this acquisition Dimension Data's strategic positioning and growth prospects
will be enhanced by strong technical and management skills as well as
improved customer ownership through being able to offer a unique and
differentiated solution.
Dimension Data has reached a point where it has global coverage, is first-to-
market in its ability to deliver proactive, real-time, on-line connectivity
and integration services and with the successful integration of Proxicom,
will be uniquely positioned to offer a total solution to multi-national
customers.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 31 March 2001
Note Unaudited Unaudited
Audited
Six months Six months
Year
ended ended
ended
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Turnover
Continuing operations 1,141,069 798,158
1,942,576
Acquisitions 59,022 -
-
Group turnover 1 1,200,091 798,158
1,942,576
Associates 25,107 16,719
33,922
Total turnover 1,225,198 814,877
1,976,498
Operating profit before goodwill
amortisation 1 119,784 86,968
210,350
Goodwill amortisation
- continuing operations (264,362) (70,599)
(292,003)
Goodwill amortisation - acquisitions (12,979) -
-
Group operating (loss)/profit
Continuing operations (156,300) 16,369
(81,653)
Acquisitions (1,257) -
-
1 (157,557) 16,369
(81,653)
Share of operating profit/
(loss) in associates 2,232 (22)
1,999
Total operating (loss)/profit (155,325) 16,347
(79,654)
Exceptional items - continuing
operations 2 77,696 -
(3,320)
Loss on termination of an
operation 2 - -
(7,195)
Profit on sale of fixed asset
investments and subsidiaries 2 77,696 -
3,875
(Loss)/profit on ordinary
activities before interest (77,629) 16,347
(82,974)
Investment income 1,200 3,072
4,179
Net interest receivable 36,366 5,114
28,097
(Loss)/profit on ordinary
activities before taxation (40,063) 24,533
(50,698)
Tax charge on (loss)/profit
on ordinary activities 3 (42,356) (27,150)
(67,044)
Loss on ordinary activities
after taxation (82,419) (2,617)
(117,742)
Equity minority interests (15,674) (18,598)
(33,743)
Loss for the period (98,093) (21,215)
(151,485)
Earnings/(loss) per share* US cents US cents US
cents
Basic earnings before goodwill
amortisation and exceptional items
per ordinary share 4 8.4 6.5
16.1
Basic loss per ordinary share 4 (8.1) (2.8)
(16.9)
* Prior period earnings per share have been adjusted for the prior year
capitalisation award.
CONSOLIDATED BALANCE SHEET
as at 31 March 2001
Unaudited Unaudited
Audited
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Fixed assets
Intangible assets 3,685,394 2,777,225
3,130,980
Tangible assets 112,663 87,060
97,470
Investments in associates 90,953 67,909
53,543
Other investments 16,980 7,675
24,945
3,905,990 2,939,869
3,306,938
Current assets
Stock 148,166 124,732
136,082
Debtors 643,591 565,513
645,120
Investments 36,109 17,530
18,822
Cash at bank and in hand 1,412,162 386,814
1,692,604
2,240,028 1,094,589
2,492,628
Creditors: amounts falling due
within one year (including convertible
debentures) (1,133,666) (792,706)
(1,223,583)
Net current assets 1,106,362 301,883
1,269,045
Total assets less current liabilities 5,012,352 3,241,752
4,575,983
Provisions for liabilities and charges (20,439) -
(21,011)
Equity minority interests (111,579) (351,289)
(399,774)
Total net assets 4,880,334 2,890,463
4,155,198
Capital and reserves
Equity shareholders' funds 4,880,334 2,890,463
4,155,198
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 March 2001
Note Unaudited Unaudited
Audited
Restated
Restated
Six months Six months
Year
ended ended
ended
31 March 31 March 31
September
2001 2000
2000
$'000 $'000
$'000
Net cash inflow from operating
activities 5 43,011 51,426
201,896
Returns on investments and
servicing of finance 37,283 8,186
32,152
Taxation (29,842) (26,235)
(48,793)
Capital expenditure and financial
investment 30,750 (27,518)
(69,510)
Acquisitions and disposals (360,199) (118,099)
(298,133)
Cash outflow before use of
liquid resources and financing (278,997) (112,240)
(182,388)
Management of liquid resources (18,071) 34,970
33,678
Financing 70,309 219,634
1,590,124
(Decrease)/increase in cash
in the period (226,759) 142,364
1,441,414
Reconciliation of net cash flow to
movement in net cash
(Decrease)/increase in cash
in the period (226,759) 142,364
1,441,414
Cash outflow/(inflow) from
increase/(decrease) in liquid
resources 18,071 (34,970)
(33,678)
Change in net cash resulting from
cash flows (208,688) 107,394
1,407,736
Non-cash redemption of debentures - 100
100
Non-cash movement in debt - -
(282,496)
Loans and finance leases acquired
with subsidiaries - 24
-
Translation difference (34,227) (28,056)
(32,722)
Movement in net cash for the period (242,915) 79,462
1,092,618
Net cash at beginning of the period 1,305,994 213,376
213,376
Net cash at end of the period 1,063,079 292,838
1,305,994
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 31 March 2001
Unaudited Unaudited
Audited
Six months Six months
Year
ended ended
ended
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Loss for the period (98,093) (21,215)
(151,485)
Currency translation differences on
foreign currency net investments (30,730) (36,799)
(126,875)
Total recognised losses
relating to the period (128,823) (58,014)
(278,360)
1. SEGMENTAL ANALYSIS - BY CLASS OF BUSINESS
Turnover Unaudited Unaudited
Audited
Restated
Restated
Six months Six months
Year
ended ended
ended
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Network Services 1,064,525 672,542
1,639,268
i-Commerce 127,825 125,419
293,104
Protocol - -
2,707
Investment holding and management 7,741 197
7,497
Group turnover 1,200,091 798,158
1,942,576
Operating (loss)/profit Unaudited Unaudited
Audited
Restated
Restated
Six months Six months
Year
ended ended
ended
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Network Services 117,024 81,290
171,064
i-Commerce 12,001 15,157
39,342
Protocol (112) -
2,449
Investment holding and management (9,129) (9,479)
(2,505)
Operating profit before goodwill
amortisation 119,784 86,968
210,350
Goodwill amortisation (277,341) (70,599)
(292,003)
Operating (loss)/profit (157,557) 16,369
(81,653)
2. EXCEPTIONAL ITEMS
Unaudited Unaudited
Audited
Six months Six months
Year
ended ended
ended
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Provision for closure costs in respect
of the Communications
Division of GK Communications - -
(7,195)
Net profit on part disposal of subsidiary 77,696 -
-
Net profit on sale of fixed asset investments - -
3,875
Total exceptional items 77,696 -
(3,320)
3. TAX CHARGE ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
Unaudited Unaudited
Audited
Six months Six months
Year
ended ended
ended
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Payable in respect of the current period
(including associates) 42,749 29,520
67,009
Adjustments to prior years' tax provision (393) (2,370)
35
42,356 27,150
67,044
4. EARNINGS/(LOSS) PER ORDINARY SHARE
Unaudited Unaudited
Audited
Six months Six months
Year
ended ended
ended
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Loss for the period (98,093) (21,215)
(151,485)
Basic loss attributable to ordinary
shareholders (98,093) (21,215)
(151,485)
Goodwill amortisation 277,341 70,599
292,003
Basic earnings before goodwill
amortisation attributable to
ordinary shareholders 179,248 49,384
140,518
Exceptional items (77,696) -
3,320
Basic earnings before goodwill
amortisation and exceptional items 101,552 49,384
143,838
Weighted average number of ordinary
shares ('000) 1,212,270 754,237
895,008
Earnings per share (US cents) *
Basic earnings before goodwill amortisation
and exceptional items per ordinary share* 8.4 6.5
16.1
Basic loss per ordinary share (8.1) (2.8)
(16.9)
* Prior period weighted average number of ordinary shares and earnings per
share have been adjusted for the prior year capitalisation award.
5. RECONCILIATION OF OPERATING (LOSS) /
PROFIT TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
Unaudited Unaudited
Audited
Restated
Restated
Six months Six months
Year
ended ended
ended
31 March 31 March 30
September
2001 2000
2000
$'000 $'000
$'000
Operating (loss)/profit (157,557) 16,369
(81,653)
Depreciation 21,344 16,150
39,252
Goodwill amortisation 277,341 70,599
292,003
Loss on sale of tangible fixed assets 603 1,273
1,480
Increase in stock (10,972) (15,615)
(38,194)
Decrease/(increase) in debtors 41,429 (116,389)
(108,389)
(Decrease)/increase in creditors (129,177) 79,039
97,397
Net cash inflow from operating activities 43,011 51,426
201,896
6. Financial information is presented on the basis of the accounting
policies of the Dimension Data Group as set out in the Annual Report and
Accounts for the year ended 30 September 2000. The unaudited interim results
should therefore be read in conjunction with the Dimension Data 2000 Annual
Report and Accounts. The half year results are unaudited but have been
reviewed by the auditors. The results for the year ended 30 September 2000
do not comprise statutory accounts for the purposes of Section 240 of the
Companies Act 1985 and have been extracted from the Group's published
accounts for that period which have been filed with the Registrar of
Companies. The audit report on those accounts was unqualified and did not
contain a statement under Section 237 (2) or (3) of the Companies Act 1985.
The comparative cash flow statements have been restated. Deferred
consideration paid, which was previously reported as a creditors cashflow,
has now been disclosed as an element of "acquisitions and disposals" cash
flow.
The comparative segmental analyses have been restated to align the
previously reported analyses with current classifications.
7. Copies of this report are being sent to shareholders, and are available
to the public at the Company's registered office, 6th Floor, Cassini House,
57 St James's Street, London, SW1A 1LD.
INDEPENDENT REVIEW REPORT BY DELOITTE & TOUCHE TO DIMENSION DATA HOLDINGS
plc
Introduction
We have been instructed by the Company to review the financial information
set out above and we have read the other information contained in the
Interim Report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' Responsibilities
The Interim Report, including the financial information contained therein,
is the responsibility of, and has been approved by the Directors. The
Listing Rules of the UK Listing Authority require that the accounting
policies applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of Group management and applying analytical procedures
to the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation have
been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with United Kingdom auditing standards and
therefore provides a lower level of assurance than an audit. Accordingly, we
do not express an audit opinion on the financial information.
Review Conclusion
On the basis of our review, we are not aware of any material modifications
that should be made to the financial information as presented for the six
months ended 31 March 2001.
Deloitte & Touche
Chartered Accountants
Hill House
1 Little New Street
London
EC4A 3TR
14 May 2001
