| Tue 15 Apr 2003, 14:17 | | DATACENTRIX HOLDINGS LIMITED - AUDITED RESULTS FOR |
|
DATACENTRIX HOLDINGS LIMITED
REGISTRATION NUMBER: 1998/006413/06
SHARE CODE: DCT
ISIN CODE: ZAE 000016051
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2003
HIGHLIGHTS
- Revenue increased by 48% to R770,7 million
- Operational performance (EBITDA) increased by 48% to R58,3 million
- Headline earnings per share (HEPS) increased by 31% to 21.8 cents and earnings
per share by 38% to 18.6 cents
- Cash generated from operations of R62,1 million, resulting in R118 million
cash on hand, with no interest bearing debt
- Five year HEPS compound annual growth rate of 36% and EPS annual growth rate
of 32%
Consolidated Income Statement
for the year ended 28 February 2003
Group
2003 2002
R"000 R"000
Revenue 770 738 521 581
Operating income before
depreciation, profit (loss)
on disposal of
business, goodwill amortised
and interest (EBITDA) 58 314 39 378
Depreciation (5 587) (4 127)
Net profit (loss) from disposal of business 1 383 (2 220)
Goodwill amortised (7 678) (3 002)
Operating income before interest
and taxation (EBIT) 46 432 30 029
Net interest received 7 420 1 094
Share of associate income 1 134 -
Income before taxation 54 986 31 123
Taxation (18 069) (10 221)
Net income after taxation 36 917 20 902
Loss attributable to outside
shareholders in subsidiary - 1 444
Earnings attributable to ordinary
shareholders 36 917 22 346
Accumulated profits at the
beginning of the year 68 172 45 826
Accumulated profits at the end of the year 105 089 68 172
Headline and diluted headline
earnings per ordinary share (cents) 21.8 16.7
Basic and diluted basic earnings
per ordinary share (cents) 18.6 13.5
Weighted average number of shares
in issue (000"s) 198 363 165 341
Reconciliation of Headline Earnings
Net income after taxation 36 917 20 902
Loss attributable to outside
shareholders in subsidiary - 1 444
Goodwill amortised 7 678 3 002
Net (profit) loss from disposal
of business (1 383) 2 220
Headline earnings for the year 43 212 27 568
Consolidated Balance Sheet
as at 28 February 2003
Group
2003 2002
R"000 R"000
ASSETS
Non-current assets 79 159 51 597
Property and equipment 14 191 12 479
Intangible assets 37 191 16 658
Investment in associate 916 1 633
Investment 5 527 1 641
Deferred taxation 11 096 9 072
Loan to share trust 10 238 10 114
Current assets 249 042 203 416
Inventories 10 403 7 583
Accounts receivable 120 884 124 373
Bank balances and cash 117 755 71 460
TOTAL ASSETS 328 201 255 013
EQUITY AND LIABILITIES
Capital and reserves 170 202 119 345
Share capital 20 19
Share premium 43 755 31 994
Non-distributable reserves 14 543 14 543
Acquisition consideration (shares)
due to vendors 6 795 4 617
Accumulated profits 105 089 68 172
Non-current liabilities
Acquisition consideration
(long-term cash) due to vendors 12 155 6 390
Current liabilities 145 844 129 278
Accounts payable 102 852 103 933
Provisions 3 295 3 291
Deferred revenue 21 555 11 746
Acquisition consideration
(short-term cash) due to vendors 7 231 2 735
Taxation 10 911 7 573
TOTAL EQUITY AND LIABILITIES 328 201 255 013
Net asset value per share (cents) 88 64
Tangible net asset value
per share (cents) 69 55
Number of shares in issue (000"s) 193 081 187 008
Statement of Changes in Equity
for the year ended 28 February 2003
Opening balance 119 345 72 279
Net income for the period 36 917 22 346
Shares issued - 21 586
Share issue expenses (242) (385)
Acquisition consideration due share issues 15 224 -
Non-achievement of profit warranties (1 042) 3 519
Closing balance 170 202 119 345
Consolidated Cash Flow Statement
for the year ended 28 February 2003
Group
2003 2002
R"000 R"000
Net cash inflow from operating activities 62 099 25 206
Net cash outflow from investing activities (12 828) (11 004)
Net cash (outflow)/inflow from
financing activities (2 976) 12 169
Net increase in cash and cash equivalents 46 295 26 371
Cash and cash equivalents
at the beginning of the year 71 460 45 089
Cash and cash equivalents
at the end of the year 117 755 71 460
Commentary
Datacentrix is proud to present its fifth set of solid annual results since
listing on the JSE Securities Exchange main board in September 1998.
The Group continues to show solid growth in a difficult trading environment.
The sector continues to consolidate, with companies showing considerable strain
both in operational and financial performance. Datacentrix"s strong delivery
capacity, operational performance, balance sheet and empowerment profile has
made it an ideal partner for vendors and clients looking for a long-term
strategic partner.
Compared to the corresponding prior year results:
Revenue increased by 48% to R770,7 million
Operational performance (EBITDA) increased by 48% to R58,3 million
Headline earnings per share (HEPS) increased by 31% to 21.8 cents and earnings
per share by 38% to 18.6 cents
Cash generated from operations of R62,1 million, resulting in R118 million cash
on hand, with no interest-bearing debt
Five year HEPS compound annual growth rate of 36% and EPS annual growth rate of
32%
Taxation has been provided for at the full rate
Net asset value increased by 38% to 88 cents per share and tangible net asset
value by 26% to 69 cents per share
Nature of Business
The Group"s major activities comprise the supply, integration and optimisation
of IT-infrastructure, solutions and related services to enterprise South Africa.
Infrastructure
The Group"s top-rated accreditation and positioning with international
technology vendors makes it the partner of choice for the supply and maintenance
of enterprise infrastructure requirements. Server consolidation trends are
fuelling the demand for high-end servers, storage area networks solutions and
enterprise backup library solutions. Multi-year contracts have been secured or
renewed for the supply, maintenance and support of IT infrastructures.
The acquisition of SM NetworX to bolster the Group"s market presence in the
Johannesburg market has been completed. The strategic fit was compelling in that
both companies are IT infrastructure and services providers with a strong
customer focus, tight operational and financial controls and a performance
driven culture. This has facilitated a full and immediate integration of this
acquisition, which now forms the platform for aspirations for a bigger market-
share in the greater Johannesburg market. The Group has also performed extremely
well in the other regions, particularly our Cape Town office, which has exceeded
all expectations. The Group"s empowerment profile makes it extremely well
positioned to gain more market share of government increased capital
expenditure.
Solutions
The Solutions unit offers hosted services, consulting, supply, implementation
and training of business solutions for the enterprise market. It"s skills base
focuses on hosted application services, financial systems, data mining,
archiving, data exchange, workflow and the integration of dissimilar back end
systems within the enterprise. The following industry drivers will fuel strong
growth in this business:
Microsoft"s entry into the business solutions space;
Archiving of documents and data for statutory requirements;
Integration of applications inside of the enterprise;
Document management and workflow to optimise existing processes;
Business intelligence to support business decisions by interpreting unstructured
data; and
Outsourcing the hosting of business applications and the relevant
infrastructure.
Services
Datacentrix has an impressive array of service accreditations that were
initially obtained to ensure high quality support to the Group"s Infrastructure
customers. These accreditations also allow the Group to provide in-warranty
repairs to its customers on behalf of the vendors. The key services of
configuration, installation, hardware maintenance, desktop/server support,
operating system upgrades and infrastructure outsourcing continue to be the
divisions focus. The increased momentum towards selective or full outsourcing
continues and we have specific competencies in the printer, desktop and server
environments.
Black Economic Empowerment ("BEE")
Datacentrix continues to entrench itself as a truly South African company,
embracing BEE at all levels within the organization and through its equity
structure. During February 2002, the BEE shareholding was enhanced with an
issue of new shares, raising the BEE equity stake to 49% with the anticipation
of shareholder dilution resulting from acquisitions. In the past year BEE
shareholding has proportionately diluted to 47% resulting from acquisitions made
through the year. Although further dilutions are anticipated in the event of
more acquisitions being made, the empowerment shareholding will not be diluted
below strategic levels.
Strong focus on employment equity profile has been maintained with 43% of all
personnel being Black and 63% from the designated group at year-end. Ahmed
Mahomed has been appointed to the board of Datacentrix as Managing Director of
infrastructure, the largest division of the group. Liz Naidoo has joined the
executive team as Chief Financial Officer for the Group.
Corporate Governance
A corporate governance review has been underway since the publication of the new
King II guidelines. This process is aimed at bringing Datacentrix structures in
line with these guidelines and with the JSE Securities Exchange new listing
requirements. A systematic approach has been adopted, which includes the
evaluation of the board composition and membership of board committees;
performance of the board, its directors and committees; capacity to report on
the triple bottom-line; and processes to ensure that fiduciary care is exercised
in a transparent manner. A Corporate Governance Committee chaired by an
independent non-executive director Imogen Mkhize, drives this review process
with the goal of further deepening the culture and ethic of corporate governance
already present in the company.
Future Prospects
Datacentrix has successfully implemented its growth strategy and remains poised
to make judicious and opportune acquisitions in addition to its strong organic
growth strategy. To date it"s focus on the South African market and real
customer needs have shielded Datacentrix from the global slowdown. The Group
remains extremely well positioned to take advantage of the continued shakeout
and consolidation in the IT industry. Datacentrix is the strategic partner of
choice for the technology partners it represents in South Africa, and it"s
valued enterprise customers. The Group is confident that growth will continue
in the next financial year.
Dividends
No dividends have been declared or paid during this year. The board reviews the
dividend policy on an ongoing basis. At present the directors believe that the
cash resources and positive cash flow can be best employed within the Group to
increase returns to shareholders and to fund organic or acquisitive growth in a
market of consolidation and industry volatility.
Accounting Policies
The financial statements have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and the accounting policies
used in their preparation are consistent with those adopted in the previous
financial year.
Auditor"s opinion and subsequent events
These results have been audited by the Group"s auditors, Deloitte & Touche, and
a copy of their unqualified audit report is available for inspection at the
company"s registered office. No material events have occurred between the end
of the financial year and the date of the audit report.
For and on behalf of the Board:
Gary Morolo Gerhard Uys
Executive Chairman Group Managing Director
15 April 2003
Pretoria
Directors:
Gary Morolo, Gerhard Uys, Klaas Lammers, Stewart Barker, Charl Joubert, Ahmed
Mahomed**, Natanya Kuper*, Sam Nematswerani*, Joan Joffe*, Imogen Mkhize*,
Christoff Botha*
* Non-executive
**Appointed to the board on 1 March 2003
Registered office: Transfer secretaries:
Sanwood Park Block 7 Computershare Investor
Services Limited
379 Queens Crescent 70 Marshall Street
Lynnwood Johannesburg
Pretoria
www.datacentrix.co.za
