| Thu 17 Jan 2002, 0:00 | | Datacraft Asia Announces Interim Results In Line |
|
Dimension Data Holdings plc
(Incorporated in the United Kingdom)
Registration number 3704278
Share Code: DDT
ISIN Code: GB0008435475
News Release
Datacraft Asia announces interim results
in line with expectations
Singapore, 17 Jan 2002. . . Datacraft Asia, the region's leading networking
systems integrator and e-business enabler, has reported an operating profit
after tax and minorities (excluding goodwill amortisation and exceptional
items) of US$6.5 million on revenues of US$217.5 million for the first half
ended 31 December 2001. This achievement falls within the range of profit
expectations which the company announced in its trading statement of 1st
November 2001.
The company has conducted a restructuring exercise in the first half in
order to bring expenses in line with prevailing business volumes.
Accordingly, a one-off restructuring charge of US$6.7 million (before tax)
was taken in the first half. After this one-off charge, the company
returned a positive profit, again in line with the forecast made in the
company's 1st November 2001 announcement.
As a result of recent changes in the Singapore statements of accounting
standard, Datacraft is required to amortise the goodwill on acquired
companies. During the first half, this charge amounted to US$2.18 million.
"I am pleased the company achieved the revised targets we set in November
last year. Datacraft Asia underwent one of its worst trading periods during
the first half, particularly following the tragic events in the USA on 11th
September and the subsequent significant market slowdown. As a result, our
overall business volumes have dropped approximately to the previous year's
level," said Des Althorp, Chairman of Datacraft Asia.
"We moved rapidly to reduce our total expenses and fixed cost to last year's
level through a retrenchment and rationalisation exercise in the last few
months. As a result, we are now on track with our cost control and enter the
second half with a business model trimmed to accommodate the lower level of
business volumes.
"Although business performance has somewhat improved with orders recovering
from the October low, trading conditions remain difficult and visibility
unclear. However, we believe we are still considerably ahead of our
competitors even in this difficult time.
"Inevitably, the slowdown seriously affected the enterprise market but we
continued to win major IP infrastructure projects from service providers
that amounted to approximately US$40 million in the first half. Services
remain the fastest growing proportion of our business, with strong uptake
for our iBOSS, iCommerce, Insite and security services.
"The Group has now structured its operations to achieve business levels in
the second half of the year approximately in line with those recorded in the
corresponding period of the previous year.
"Looking ahead, we remain focused on strengthening our capabilities in
application software and value-added services. For this purpose, we brought
together our iCommerce and iBOSS software skills under a unified Business
Solutions Group. Also, to capitalise on new opportunities in the service
provider market, we are planning to introduce new offerings in soft-switch,
SMS and unified messaging for GPRS/3G operators. Our strong focus on
addressing these growing opportunities will position us to accelerate the
business once the economy recovers," said Althorp.
Datacraft Asia's key achievements for first half of financial year 2002
include:
Strong uptake of iBOSS among service providers
Datacraft iBOSS, the company's house brand of integrated operation and
business support systems, has scored a direct hit with service providers
across the region. As a result of its success, iBOSS was recently rolled
out in Korea and Japan. Plans are also in the pipeline to develop a China-
specific iBOSS solution to cater to the needs of that market.
Following the announcement of the US$9 million JiTong Network project,
Datacraft continues to achieve major iBOSS successes. They include projects,
in the US$1 - US$2 million range, for a major Korean service provider, a
major Indonesian service provider, Citibank, a major wholesale provider in
Vietnam, an Indonesian cellular carrier and Hutchison GlobalCenter.
Major success in e-Commerce
Datacraft continues to clinch new e-commerce projects, with average contract
value ranging from US$1 - US$2 million. Projects secured in the first half
include:
an investment management and trading solution for a major fund management
house
a global wealth and risk management system for multiple locations in Europe
and Asia
an e-Trading solution for a leading investment and securities firm in Hong
Kong
an e-reservation system for 200 hotels in Southern China
the largest Hotel Pay TV Provider in Southern China
a procurement and order management System for Siu Wei salt supply in China
an Integrated Apparel Tracking System and B2B Exchange for Sing Lun in China
Business Solutions Group established
To provide strong application services capabilities and expertise to both
the service provider and enterprise customers, iBOSS and iCommerce are
merged to form the Business Solutions Group. The group is headed by Wong Wen
Ming, who was responsible for establishing the iBOSS group. The group will
also focus on building higher level of consultancy and application skill set
across Datacraft operations.
iSquare Collaborative Commerce Solution launched
iSquare Asia, a member of the Business Solutions Group, has developed a
series of collaborative technology applications, known as the iSquare
Collaborative Commerce Solution (iCCS), to enable the speedy deployment of
fully functional supply and demand chains for multiple Asian industries.
Developed to conform to Asian business practices and processes, iCCS can be
easily adopted by and implemented for any Asian markets. iCCS has been
endorsed by the China High Technology Industrialisation Association,
following an extensive compliance test and technical evaluation of the
software.
Services business expansion
Services continues to be the fastest growing part of Datacraft's business
with increased number of customers taking on its security, Insite, Primer
and Uptime services. Some of the new customers for Insite Services include
Zurich Insurance (Japan), Mori Building (Japan), ACC (New Zealand Government
Accident and Disability Insurance Organisation) and Tetrapak (Singapore).
In strengthening its security offerings, Datacraft has teamed up with AIU to
provide risk management solutions that combine Internet-specific insurance
coverage with network security service for e-business. The company has also
organised roadshows across Asia to address network security concerns.
Training Partners offerings broadened
Training Partners (TP), a Datacraft subsidiary, expanded its horizon to
focus on project management, security and a wider coverage of networking
training. In expanding its security offerings, TP partnered with Checkpoint
Software and Symantec to provide essential skills in security management and
implementation. TP also introduced training in cutting-edge MPLS technology
and advanced MPLS VPN solutions, wireless LAN and IP telephony to complement
its coverage on networking training. Overall training business is on track
to achieving its original targets.
Market share growth in telecom industry
Datacraft continues to maintain its leadership in the service provider
market by clinching several sizeable contracts from major service providers
in Taiwan, Thailand, Korea, Indonesia, and China, reinforcing its leadership
in Asian telecom network integration. More notably, as many of the IP
backbones are being used for voice deployment, Datacraft is pitched into the
larger market for replacement of national voice, as well as data networks.
The three biggest service provider contracts raked in more than US$30
million for the first half.
Turnkey networks for enterprise customers
A massive, high-speed, broadband backbone network covering 15 cities in
Guangdong province was put in place by Datacraft to support the largest
event on China's domestic sporting calendar. The US$4.2 million project for
the Guangdong Information Centre provided monitoring, scores, multimedia
information and video-on-demand systems for the 9th National Games.
Datacraft also made inroads into the healthcare sector with the
implementation of local area network and wide area network systems at the
nine polyclinics operated by the National Healthcare Group throughout
Singapore to create an efficient and fully integrated public healthcare
service.
Strengthened management team
Datacraft continues to strengthen its management team with the appointment
of Bill Padfield as Chief Operating Officer and Philip Chu as Chief Finance
Officer. Padfield was Senior Vice President and General Manager, Asia-
Pacific, Australasia of Equant. Chu was previously the Worldwide Sales and
Marketing Finance Director in Advanced Micro Devices Inc (AMD). Chu succeeds
Victor Yung, who reverts to his previous role as Advisor to CEO until he
resigns from the company at the end of January 2002. The management team
also saw the appointment of Raymond So as Managing Director of Greater China
and Yutaka Aoki as Regional Director of Japan.
Ron Cattell, CEO of Datacraft Asia was appointed as an executive director to
the board of Dimension Data, which owns 51 per cent of Datacraft Asia.
Accolades for performance
Datacraft has once again been named among the world's 200 best small
companies compiled by the Forbes Global magazine. The company was also
voted a runner-up for the Most Transparent Company, Technology & Electronics
Category 2001 by Securities Investors Association Singapore.
Notes to editor: Datacraft Asia is the region's leading independent network
systems integrator and e-business enabler. Listed on the main board of the
Singapore Exchange, Datacraft designs, builds and manages Internet
infrastructure, implementing online business solutions and delivering value-
add networking services for service providers and corporate customers across
Asia Pacific.
The company offers unparalleled regional coverage and specialist support
with its extensive network of 63 offices throughout Singapore, Malaysia,
Hong Kong, China, India, Taiwan, Indonesia, Thailand, New Zealand, Vietnam,
Philippines, Japan and Korea. Datacraft is a member of the Dimension Data
Group. Listed on the London Stock Exchange, Dimension Data is a leading
global network services and i-Commerce solutions provider. More information
about Datacraft Asia can be found on the Web at www.datacraft-asia.com.
For further information, please contact :
Esther Quah (Datacraft Asia) Tel: 65-323 7988/ 3226619
Dimension Data Holdings plc
(Incorporated in the United Kingdom)
Registration number 3704278
Share Code: DDT
ISIN Code: GB0008435475
DATACRAFT ASIA LTD
Unaudited Half Year Financial Statement And Dividend Announcement
Half-year financial statement on consolidated results for the six months
ended 31 December 2001.
These figures have not been audited.
Group Company
US$'000 % US$'000 %
Latest Previou Change Latest half Previous Change
half s half year half year
year year
1.(a) Turnover 217,542 268,992 (19.1) 15,919 14,944 6.5
1.(b) Investme 0 0 0 0 0 0
nt
income
1.(c) Other 648 3,057 (78.8) 300 503 (40.4)
income
includin
g
interest
income
2.(a) Operatin 17,305 33,996 (49.1) 8,042 5,848 37.5
g profit
before
income
tax,
minority
interest
s,
extraord
inary
items,
interest
on
borrowin
gs,
deprecia
tion and
amortisa
tion,
foreign
exchange
gain/(lo
ss) and
exceptio
nal
items
2.(b)(i) Interest (309) (523) (40.9) (113) 0 100.0
on
borrowin
gs
2.(b)(ii) Deprecia (8,920) (4,497) 98.4 (971) (916) 6.0
tion and
amortisa
tion ##
2.(b)(iii) Foreign (16) (213) (92.5) (264) (28) n.m.
exchange
gain/(lo
ss)
2.(c) Exceptio (6,676) 0 100.0 (746) 0 100.0
nal
items @@
2.(d) Operatin 1,384 28,763 (95.2) 5,948 4,904 21.3
g profit
before
income
tax,
minority
interest
s and
extraord
inary
items
but
after
interest
on
borrowin
gs,
deprecia
tion and
amortisa
tion,
foreign
exchange
gain/(lo
ss) and
exceptio
nal
items
Group Company
US$'000 % US$'000 %
Latest Previou Change Latest Previou Change
half s half half s half
year year year year
2.(e) Income 0 0 0 0 0 0
derived
from
associat
ed
companie
s
2.(f) Less (2,338) (7,161) (67.4) (580) (839) (30.9)
income
tax
2.(g)(i) Operatin (954) 21,602 (104.4) 5,368 4,065 32.1
g profit
after
tax
before
deductin
g
minority
interest
s
2.(g)(ii) Less (650) (534) 21.7 0 0 0
minority
interest
s
2.(h) Operatin (1,604) 21,068 (107.6) 5,368 4,065 32.1
g profit
after
tax
attribut
able to
members
of the
company
2.(i)(i) Extraord 0 0 0 0 0 0
inary
items
2.(i)(ii) Less 0 0 0 0 0 0
minority
interest
s
2.(i)(iii) Extraord 0 0 0 0 0 0
inary
items
attribut
able to
members
of the
company
2.(i)(iv) Transfer 0 0 0 0 0 0
to/from
Exchange
Reserve
2.(i)(v) Transfer 0 0 0 0 0 0
to
Capital
Reserve
2.(i)(vi) Transfer 0 0 0 0 0 0
to
Reserve
Fund
2.(j) Operatin (1,604) 21,068 (107.6) 5,368 4,065 32.1
g profit
after
tax and
extraord
inary
items
attribut
able to
members
of the
company
## Depreciation and amortisation in 2(b)(ii) above comprises :
Group Company
US$'000 % US$'000 %
Latest Previous Change Latest Previous Change
half year half year half half year
year
Depreciation of (6,731) (4,497) 49.7 (971) (916) 6.0
fixed assets,
normal charge and
other amortisation
Amortisation of (2,189) 0 100.0 0 0 0
goodwill ________ ________ ______ ______
(8,920) (4,497) 98.4 (971) (916) 6.0
@@ The exceptional items in 2(c) above is a one-off item for restructuring
and consists of the following in the latest half year :
Group Company
US$'000 US$'000
Staff retrenchment (3,356) (583)
Write off of capital (3,320) (163)
assets ________ ________
(6,676) (746)
====== ======
Additional information :
Analysis of on-going operations (excluding goodwill
amortisation and exceptional items)
During the period under review, the Group incurred the following :
(i) One-off charges of US$6,676,000 (as per 2(c) above) for restructuring as
indicated in the Company's announcement of 1 November 2001; and
(ii) Goodwill amortisation charge of US$2,189,000, included in 2(b)(ii)
above. This charge is incurred upon acquisition of Dasan in Korea and
arises for the first time in this period due to changes in the Singapore
Statements of Accounting Standard.
To enable shareholders to properly compare this period's performance of the
Group's on-going operations against that of the corresponding period in the
previous year, the comparative information is given below, which excludes
items (i) and (ii) above.
Group Company
US$'000 % US$'000 %
Latest Previous Change Latest Previous Change
half year half year half half year
year
Operating profit 17,305 33,996 (49.1) 8,042 5,848 37.5
before income
tax, minority
interests,
extraordinary
items, interest
on borrowings,
depreciation and
amortisation,
foreign exchange
gain/(loss) and
exceptional items
Interest on (309) (523) (40.9) (113) 0 100.0
borrowings
Depreciation and (6,731) (4,497) 49.7 (971) (916) 6.0
amortisation
Foreign exchange (16) (213) (92.5) (264) (28) n.m.
gain/(loss)
Operating profit 10,249 28,763 (64.4) 6,694 4,904 36.5
before income
tax, minority
interests and
extraordinary
items but after
interest on
borrowings,
depreciation and
amortisation,
foreign exchange
gain/(loss) and
exceptional items
Less income tax (2,973) (7,161) (58.5) (747) (839) (11.0)
Operating profit 7,276 21,602 (66.3) 5,947 4,065 46.3
after tax before
deducting
minority interest
Less minority (739) (534) 38.4 0 0 0
interests
Operating profit 6,537 21,068 (69.0) 5,947 4,065 46.3
after tax
attributable to
members of the
company
n.m. = not meaningful
Group Figures
Latest half Previous half
year year
3.(a) Earnings per share based
on 2(h) above after
deducting any provision
for preference dividends:-
(i) Based on existing (0.35) US 4.62 US cents
issued share capital cents
(ii) On a fully diluted (0.35) US 4.52 US cents
basis cents
3.(b) Earnings per share based
on 2(j) above:-
(i) Based on existing (0.35) US 4.62 US cents
issued share capital cents
(ii) On a fully diluted (0.35) US 4.52 US cents
basis cents
3.(c) Net tangible asset 38.02 US 44.80 US
backing per ordinary cents cents
share
Group Figures
Latest half year Previous half year
3 Earnings per share before
. goodwill amortisation and
(
d
)
exceptional items :-
(i) Based on existing
issued share 1.42 US cents 4.62 US cents
capital
(ii) On a fully 1.42 US cents 4.52 US cents
diluted basis
4.(a) Amount of any adjustment for under or overprovision of tax in
respect of prior years
NIL
4.(b) Amount of any pre-acquisition profits
NIL
4.(c) Amount of profits on any sale of investments and/or properties
Sale of investments/properties $Profit/(L
oss)
NIL
4.(d) Any other comments relating to Paragraph 4
NIL
5.(a) Review of the performance of the company and its principal
subsidiaries
In the announcement dated 1 November 2001, it was explained that the Group
had suffered a downturn in its business following the events in the USA on
11 September 2001 and the subsequent significant market slowdown. There had
been several customer projects suspended and new projects deferred. In the
light of these operating conditions, these results are in line with the
profit projection made on 1 November 2001 for the first half year.
Turnover for the Group declined by 19.1% to US$217.5 million for the half
year ended 31 December 2001 (FY01: US$269.0 million). Operating profit
before tax (excluding goodwill amortisation and exceptional items) declined
by 64.4% to US$10.2 million (FY01: US$28.8 million). Gross margins
remained stable. Net profits were impacted by expenses that had grown in
anticipation of a higher turnover.
To reduce expenses, the Group has substantially completed a restructuring
exercise, selectively based on the prospects of individual geographic and
business units. The half-year financial results under review reflect one-off
charges (before tax) of US$6.7 million as a result of the restructuring
exercise.
Included in the depreciation and amortisation charge is goodwill
amortisation amounting to US$2.2 million. This was mainly due to the
acquisition of Dasan in Korea in August 2001. This accounting treatment is
applied to the profit & loss statements for the first time as a result of
recent changes to the Singapore Statements of Accounting Standard.
Despite the decline in turnover, all countries in Asean (Singapore,
Malaysia, Philippines, Thailand, Indonesia and Vietnam), Greater China (Hong
Kong, Taiwan and China), together with Korea and India, operated profitably.
Japan experienced a difficult time, which was in line with local economic
conditions. China has made further in-roads into the higher margin service
business.
Through the implementation of our Millennium Strategy, which focuses on high
value-added services in the telecommunication and enterprise markets, our
service revenue now accounts for 37.5% of the Group's turnover against 31.6%
in the previous full year.
In this difficult economic period, the Group has stepped up its collection
efforts and has deemed it appropriate to increase account receivable
provisions from approximately 1.2% to 3.2% of total receivables. Efficient
management of working capital has yielded US$18.0 million of positive cash
from operations.
5.(b) A statement by the Directors of the Company on whether "any item
or event of a material
or unusual nature which would have affected materially the results of
operations of the
Group and Company has occurred between the date to which the report refers
and the
date on which the report is issued". If none, to include a negative
statement.
In the opinion of the Directors of the Company, no item or event of a
material or unusual nature has occurred between the date to which the report
refers and the date on which the report is issued which would have
materially affected the results of operations of the Group and Company.
6. Commentary on current year prospects
In the next six months, the Group will continue with its Millennium
Strategy, with emphasis on :-
(i) IP infrastructure for service providers building multi-service networks
to provide the next generation of voice and multimedia services;
(ii) Back-office and billing solutions for service providers under the
iBoss brand-name;
(iii) Region-wide and global professional and outsourcing services for
large multinational corporations; and
(iv) i-Commerce and collaborative commerce solutions to improve business
effectiveness particularly in the manufacturing and finance arenas.
The Group is entering the second half of the financial year with expenses
trimmed approximately to the level of the second half of the previous year.
Whilst business visibility has slightly improved in the last 2 months,
trading conditions remain challenging. The Group has structured its
operations to achieve business levels approximately in line with those
recorded in the second half of the previous year.
7. Dividend
(a) Any dividend declared for the present financial period? None
(b) Any dividend declared for the previous corresponding period? None
(c) Date payable
Not applicable
(d) Books closing date
Not applicable
(e) Any other comments relating to Paragraph 7
None
8. Details of any changes in the company's issued share capital
During the six months ended 31 December 2001, the issued share capital of
the Company was increased to 462,457,666 shares (S$46,245,766.60) by the
issue of the following new ordinary shares of S$0.10 each fully paid:
(a) 1,174,000 shares at US$1.105 each for cash under the Datacraft Asia
Share Option Scheme;
(b) 10,000 shares at US$1.375 each for cash under the Datacraft Asia Share
Option Scheme; and
(c) 435,000 shares at US$1.490 each for cash under the Datacraft Asia Share
Option Scheme.
9. Comparative figures of the group's borrowings and debt
securities
(a) Amount repayable in one year or less, or on demand
As at 31/12/2001 As at 30/06/2001
(DD/MM/YYYY) (DD/MM/YYYY)
Secured Unsecured Secured Unsecured
US$67,000 US$22,835,000 US$19,000 US$13,905,000
(b) Amount repayable after one year
As at 31/12/2001 As at 30/06/2001
(DD/MM/YYYY) (DD/MM/YYYY)
Secured Unsecured Secured Unsecured
0 US$194,000 US$61,000 0
(c) Any other comments relating to Paragraph 9
NIL
10. Balance Sheet
Consolidated balance sheet as at 31 December 2001
31/12/2001 30/06/2001
(US$ (US$ million)
million)
Non-current assets
Fixed assets 24.57 26.36
Intangibles 28.10 1.87
______ ______
Total non-current assets 52.67 28.23
Current assets
Cash and bank balances 65.82 84.89
Trade debtors 159.81 207.70
Inventory 20.24 31.23
Other current assets 68.32 36.89
______ ______
Total current assets 314.19 360.71
Current liabilities
Bank loans, overdraft and 22.90 13.92
finance leases
Trade creditors 56.68 74.99
Other current liabilities 64.60 86.21
______ ______
Total current liabilities 144.18 175.12
Long-term liabilities
Long-term bank borrowings 0.19 0.06
and finance leases
Other non-current 15.66 9.73
liabilities ______ ______
Total non-current 15.85 9.79
liabilities ______ ______
Net assets 206.83 204.03
===== =====
Shareholders' funds 203.93 202.35
Minority interests 2.90 1.68
______ ______
206.83 204.03
===== =====
Note : As Datacraft Asia Ltd is an investment holding company, the balance
sheet of the Company has
not been included as it is not meaningful.
BY ORDER OF THE BOARD
Derek Peter Althorp
Chairman
17/01/2002
