| Thu 1 Nov 2001, 0:00 | | Datacraft Asia Ltd - Update On Trading Conditions |
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DIMENSION DATA HOLDINGS PLC
Datacraft Asia Ltd, the 51% owned Singapore listed subsidiary of Dimension
Data today issued a statement regarding current trading conditions in Asia
subsequent to the events of 11 September 2001. The full text of this
announcement appears below.
The significant change in Datacraft Asia's performance occurred in September
2001, the last trading month of Dimension Data's 2001 financial year and
therefore the effect of this on Dimension Data is not significant in this
year. In the year ended 30 September 2001, Datacraft Asia will have
accounted for approximately 14% of Dimension Data's attributable earnings.
During the past year, Dimension Data reduced its headcount in continuing
operations by 14%, cut annualised operating expenses by approximately 11%,
and focused on working capital management. It has strengthened the business
operationally to facilitate acceleration in the growth of its higher margin
services and solutions businesses.
Dimension Data will release its results for the year ended 30 September 2001
on 21 November 2001. This will be accompanied by an announcement and a
presentation detailing actions taken to align the business with current
market conditions and an in depth outlook for the 2002 financial year.
Datacraft Announcement
Datacraft Asia Ltd
Update on Trading Conditions
On 16 August 2001, in its full year results announcement, the board of
Directors of Datacraft Asia Ltd ("Datacraft" or the "Company") anticipated a
healthy growth in business and prospects in the coming year, barring
unforeseen circumstances or a significant slowdown in the Asian economies.
On 20 August 2001, the Company issued a management guideline that, barring
unforeseen circumstances or a significant further slowdown in the Asian
economies and given the mix of opportunities and risks, Datacraft and its
subsidiaries (the "Group") could grow earnings before amortisation of
goodwill on acquisitions by 30-35% in the current year.
The business outlook for the Group prior to the end of September 2001 was in
line with management's expectations and commensurate with achievement of the
profit growth rates previously forecasted to the markets.
Following the events in the USA on 11th September and the subsequent
significant market slowdown the Group suffered a downturn in its business.
There have been several customer projects suspended, new projects deferred
and one project cancelled. In the light of these operating conditions,
business prospects are below original expectations. Multinational and
Enterprise customer business has been most affected, with the slowdown
having a lesser impact on the Group's Telco business.
Under these unforeseen circumstances the Group is taking immediate action to
reduce expenses, selectively based on the prospects of individual geographic
and business units, and estimates to reduce expenses and hold back expense
growth in the current year by at least US$16 million. The expense cuts
include the retrenchment of approximately 230 employees (approximately 12%
of the workforce) in both country and head-office operations and the cost
savings related to the merging of some business units and offices.
Barring a further deterioration in the region's or global economies; the
Group is expected to make a trading profit for the first half, excluding
amortisation of goodwill, of between 30% and 40% of the profit made for the
corresponding period the previous year. Retrenchment and other
restructuring costs will be taken as a one-off charge. With a reduced
expense base in the second half of the year, the Group is expecting second
half trading profits, excluding amortisation of goodwill, to be
approximately the same level as the corresponding period the previous year.
By order of the Board of Directors
Des Althorp
Chairman
Note: The Company will be hosting two conference calls to cater for
interested parties based in US/Asia and Europe/South Africa. Investors who
wish to participate, please dial in 5-10 minutes before the scheduled time.
Details of the conference calls are as follows:
US/Asia participants
Date: 1 Nov 2001 (HK) / 31 Oct 2001 (US)
Time: 10.30am (HK) / 9.30pm (New York)
HK Toll : 852-2258-4002
US Toll : 1-312-470-7408
Singapore Toll : 65-883-9139
Passcode: 4140735
Leader : Des Althorp
Europe/South Africa participants
Date: 1 Nov 2001
Time: 5pm (HK)/ 9am (UK) / 11am (SA)
UK Toll: 44-20-7943-5370
HK Toll : 852-2258-4002
Singapore Toll : 65-883-9139
Passcode: 4140735
Leader : Ron Cattell
An Instant Replay of the conference call will be available through 7 Nov
2001:
HK Toll: 852-2802-5151
Singapore Toll: 65-883-9146
Passcode: 716410
Contacts:
Datacraft Asia Ltd
Esther Quah, + 65-323 7988/322 6619
Dimension Data Holdings plc
Dimension Data
Karen Cramer, Investor Relations, +44 20 7659 1600
Patrick Quarmby, Executive Director, +27 11 709 1059
Financial Dynamics
Giles Sanderson, + 44 20 7831 3113
James Melville-Ross, + 44 20 7831 3113
Beachhead Media & Investor Relations
Bruce Hetherington, +27 21 469 9000
Thursday, 1 November 2001
