| Tue 28 Sep 2004, 14:09 | | RESULTS FOR THE SIX MONTH |
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DATACENTRIX HOLDINGS LIMITED - UNAUDITED INTERIM RESULTS FOR THE SIX MONTH
PERIOD ENDED 31 AUGUST 2004
DATACENTRIX HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER: 1998/006413/06)
SHARE CODE: DCT
ISIN: ZAE 000016051
UNAUDITED INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 31 AUGUST 2004
Key Financial Indicators
Revenue increased 13% to R450 million
Operational profits (EBITDA) increased 43% to R43 million
Basic headline earnings per share (HEPS) increased 30% to 14.9 cents
Basic earnings per share (EPS) increased 37% to 12.6 cents
Strong operating cash flows of R50,5 million, resulting in R146,9 million cash
on hand, with no interest bearing debt
Net asset value increased 8% to 100 cents and tangible net asset value increased
16% to 86 cents
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 Unaudited Unaudited Unaudited Audited
AUGUST 2004 6 Months 6 Months 6 Months 12 Months
ended ended ended ended
31 Aug 31 Aug 31 Aug 29 Feb
2004 2003 2003 2004
R`000 R`000 R`000 R`000
Restated Original
Revenue 450 470 397 420 397 420 763 782
Earnings before depreciation, goodwill 43 173 30 179 30 179 57 16
amortised and interest (EBITDA)
Depreciation (4 481) (3 467) (3 467) (7 297)
Goodwill amortised (4 564) (4 333) (4 333) (8 672)
Operating income before 34 128 22 379 22 379 41 193
interest and taxation
Net interest received 2 929 6 246 6 246 10 476
Deemed interest (AC133 fair - (1 209) - (1 243)
value adjustment)
Share of associate income 176 144 144 343
Income before taxation 37 233 27 560 28 769 50 769
Taxation (12 424) (9 568) (9 931) (19 023)
Earnings attributable to 24 809 17 992 18 838 31 746
ordinary shareholders
Reconciliation of headline
earnings
Earnings attributable to 24 809 17 992 18 838 31 746
ordinary shareholders
Goodwill amortised 4 564 4 333 4 333 8 672
Headline earnings 29 373 22 325 23 171 40 418
Unaudited Unaudited Unaudited Audited
Post acc Post acc Pre acc Post acc
policy policy policy policy
changes changes changes changes
31 Aug 31 Aug 31 Aug 29 Feb
2004 2003 2003 2004
Restated Original
Headline earnings per ordinary 14.9 11.5 11.5 20.7
share (cents)
Diluted headline earnings per 14.2 11.2 11.5 19.9
ordinary share (cents)
Basic earnings per ordinary 12.6 9.2 9.3 16.3
share (cents)
Diluted basic earnings per 12.0 9.0 9.3 15.7
ordinary share (cents)
Weighted average number of 196 628 194 807 202 138 195 024
shares in issue (000s)
Weighted average number of 206 916 199 665 202 138 202 628
shares in issue for purposes of
dilution (000s)
CONSOLIDATED BALANCE SHEET AS
AT 31 AUGUST 2004
Unaudited Unaudited Unaudited Audited
31 Aug 31 Aug 31 Aug 29 Feb
2004 2003 2003 2004
R`000 R`000 R`000 R`000
Restated Original
ASSETS
Non-current assets 59 567 70 818 81 068 59 658
Property and equipment 19 324 15 456 15 456 13 737
Intangible assets 28 306 36 899 36 899 32 585
Investment in associate 1 405 1 257 1 257 1 233
Advance payments 1 947 5 749 5 749 3 050
Deferred taxation 8 585 11 457 11 094 9 053
Loan to share trust - - 10 613 -
Current assets 259 019 256 751 256 722 258 821
Inventories 13 963 11 482 11 482 11 707
Accounts receivable 98 109 97 453 97 453 116 092
Bank balances and cash 146 947 147 816 147 787 131 022
TOTAL ASSETS 318 586 327 569 337 790 318 479
EQUITY AND LIABILITIES
Capital and reserves 203 870 180 504 191 012 193 768
Share capital 20 20 20 20
Share premium 36 889 43 665 43 727 50 831
Treasury shares (11 843) (10 471) - (11 078)
Non-distributable reserves - 14 543 14 543 -
Acquisition consideration 1 746 8 795 8 795 1 746
(shares) due to vendors
Distributable reserves 177 058 123 952 123 927 152 249
Non-current liability
Acquisition consideration (long-- 799 920 833
term cash) due to vendors
Current liabilities 114 716 146 266 145 858 123 878
Accounts payable and accruals 75 476 90 810 90 765 86 763
Provisions 4 166 3 391 3 391 3 838
Deferred revenue on contracts 22 379 22 868 22 868 19 905
Acquisition consideration 833 11 134 11 134 11 098
(short-term cash) due to
vendors
Taxation 11 862 18 063 17 700 2 274
TOTAL EQUITY AND LIABILITIES 318 586 327 569 337 790 318 479
Net asset value per share 100 93 98 97
(cents)
Tangible net asset value per 86 74 79 81
share (cents)
Number of shares in issue 204 130 194 737 194 737 199 862
(000s)
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 Unaudited Unaudited Unaudited Audited
AUGUST 2004 6 Months 6 Months 6 Months 12 Months
ended 31 ended 31 ended 31 ended 29
Aug 2004 Aug 2003 Aug 2003 Feb 2004
R`000 R`000 R`000 R`000
Restated Original
Opening balance as previously 193 768 170 202 170 202 159 993
stated
Consolidation of Datacentrix - (10 209) - -
Holdings Share Trust
Opening balance restated 193 768 159 993 170 202 159 993
Net income for the period 24 809 17 992 18 838 31 746
Capital distribution (13 661) - - -
Share issue expenses (25) (28) (28) (86)
Profit/(loss) on sale of 167 (48) - 102
treasury shares
Deemed interest (AC133 fair - 931 - 931
value opening balance
adjustment)
Treasury shares - movement (1 188) (336) - (943)
during the period
Raised on new acquisitions - 2 000 2 000 2 025
Closing balance 203 870 180 504 191 012 193 768
CONSOLIDATED CASH FLOW
STATEMENT
FOR THE SIX MONTHS ENDED 31 Unaudited Unaudited Unaudited Audited
AUGUST 2004 6 Months 6 Months 6 Months 12 Months
ended 31 ended 31 ended 31 ended
Aug 2004 Aug 2003 Aug 2003 29 Feb
R`000 R`000 R`000 2004
Restated Original R`000
Income adjusted for non-cash 43 340 28 515 28 560 57 264
items
Working capital changes 7 242 11 718 11 673 (13 709)
- Inventory (2 256) (1 079) (1 079) (1 304)
- Receivables 17 983 23 431 23 431 4 792
- Payables (8 485) (10 634) (10 679) (17 197)
Cash generated from operations 50 582 40 233 40 233 43 555
Net interest received 2 929 6 246 6 246 10 476
Taxation paid (2 434) (3 416) (3 416) (25 959)
Capital distribution (13 661) - - -
Net cash inflow from operating 37 416 43 063 43 063 28 072
activities
Net cash outflow from investing (9 141) (7 335) (7 670) (7 380)
activities
Net cash outflow from financing (12 350) (5 696) (5 361) (7 454)
activities
Net increase in cash and cash 15 925 30 032 30 032 13 238
equivalents
Cash and cash equivalents at 131 022 117 784 117 755 117 784
the beginning of the period
Cash and cash equivalents at 146 947 147 816 147 787 131 022
the end of the period
Commentary
The directors of Datacentrix Holdings Limited present the interim financial
results of the group for the six months ended 31 August 2004. The directors are
very satisfied with the results and believe that the company is extremely well
positioned to continue its solid performance. The company`s operations remain
strong and it has achieved excellent growth in sales volumes during the period
under review, despite the continuing deflation of IT products costs.
The group`s tight operational and financial controls, strong customer and
partner focus, empowerment profile and performance-driven culture continue to
make it an ideal partner for vendors and customers looking for a long-term
strategic partner.
Nature of Business
Datacentrix is positioned as a technology reseller and solution provider. Its
major activities are the supply, integration and optimisation of IT
infrastructure, solutions and related services to enterprise South Africa.
Basis of Preparation
The interim financial statements have been prepared in accordance with the South
African Statement of Generally Accepted Accounting Practice, AC127: Interim
Financial Reporting.
Change in Accounting Policies
The JSE Securities Exchange of South Africa (`JSE`) issued guidance on the
consolidation of share trusts and the Datacentrix Holdings Share Trust is
accordingly consolidated into the results of the group. This represents a change
in accounting policy and in accordance with the requirements of AC103: Net
Profit or Loss for Period, Fundamental Errors and Changes in Accounting
Policies, the comparative figures have been restated.
The group also adopted AC133 Financial Instruments: Recognition and Measurement
during the last financial year. As a result of adopting AC133 and in accordance
with transition requirements of AC133, comparative figures have not been
adjusted except for the restatement of previous year opening retained earnings.
The implementation of AC133 had a negative impact on the group`s previous
interim results of a net R1,209 million owing to the fair valuing of acquisition
consideration due to vendors.
Infrastructure and Related Services
The Infrastructure division has shown steady growth for the six months to August
2004. The division has had healthy growth from the public sector as a result of
long outstanding tenders being awarded and also continues to win substantial
multi-year product and services deals with large blue-chip organisations.
The division has maintained the highest level of accreditations and continues to
have direct relationships with technology partners, enabling Datacentrix to
continue providing the resultant benefits to customers. Growth areas include
server consolidation, as well as managed print services. The focus on the
Microsoft space in the period under review has also resulted in the division
gaining market share in this sector.
Services range from warranty hardware maintenance services on behalf of vendors
for equipment sold, through to advanced network and mail systems design and
implementation. The project-based business has grown during the period under
review and the outsourcing business unit is particularly well positioned with a
number of blue-chip customer contracts concluded and implemented within the
reporting period. Datacentrix continues to believe that the supply of products
through Infrastructure and the technical and outsourcing capabilities of
Services provide real cost effective and capable solutions to its customers.
Solutions
The growth within Datacentrix Solutions has been fuelled by the market`s need
for ERP solutions. Other growth areas have included archiving of data and
documents, integration of dissimilar applications, document management and
workflow; business intelligence; the move towards outsourcing of business
applications; and Microsoft`s entry into the CRM market.
Due to a number of successes in the retail, health, education and manufacturing
industries, Datacentrix Solutions was named Microsoft Business Solutions Partner
of the Year for 2004 - the only Microsoft Business Solutions partner locally to
garner this award for two consecutive years. The division has also been selected
as a member of the elite Microsoft Business Solutions Inner Circle, an
accomplishment earned by firms whose sales achievement ranks them at the top
echelon of the Microsoft Business Solutions global network of value-added
reselling partners.
Black Economic Empowerment (BEE)
Datacentrix` continued BEE transformation and its hands-on approach to
empowerment has earned the group fifth place of all JSE Securities Exchange-
listed companies and highest ranked IT company on the empowerment ladder.
Datacentrix is one of only three IT companies to boast an A-rating for its
achievements by independent rating agency EmpowerDex. The company continues to
focus strongly on internal transformation imperatives and also participates
actively in the ICT forums to promote transformation.
Future Prospects
Datacentrix` solid business model, focus on business basics and its prudent and
conservative management and steadily improving empowerment profile have resulted
in its continued profitability. The group`s strategic focus remains unchanged,
with expected growth areas encompassing ERP, selective outsourcing in both the
desktop and the server environment, output management and infrastructure refresh
projects. The directors are very optimistic about the company`s prospects for
the full year and beyond.
The directors wish to thank our staff, customers and business partners for their
dedicated and constructive support over the past six months and look forward to
further positive results for the balance of the financial year.
Dividend Policy
No interim dividend has been declared. The company expects to pay a final
dividend at year end, in line with the declared dividend policy.
For and on behalf of the Board:
Gary Morolo
Executive Chairman
28 September 2004, Pretoria
Directors:
Gary Morolo (Executive Chairman), Gerhard Uys (CEO), Klaas Lammers, Stewart
Barker, Charl Joubert, Ahmed Mahomed, Elizabeth Naidoo,
Sam Nematswerani*, Joan Joffe*, Christoff Botha*, Imogen Mkhize* (* Non-
executive)
Registered Office: Block 7, Sanwood Park, 379 Queens Crescent, Lynnwood,
Pretoria
Transfer Secretaries: Computershare Investor Services 2004 (Proprietary)
Limited, 70 Marshall Street,
