| Thu 18 Nov 2004, 12:29 | | Didata presents improved results |
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Didata presents improved results
Ngcaba will not take Telkom seat
November 18, 2004
By Renée Bonorchis
Johannesburg - Andile Ngcaba, the chairman of Dimension Data (Didata) South Africa, would not sit on the Telkom board, even if his consortium succeeded in buying a 15.1 percent stake in the telecommunications giant from the Public Investment Commissioners, it emerged yesterday.
Jeremy Ord, the chairman of Didata, said: `Andile gave us an undertaking that he will not sit on the board of Telkom and be privy to their strategy.`
He said Didata hoped this would guard against a conflict of interest if the Elephant Consortium, which is led by Ngcaba, the former director-general of the department of communications, successfully negotiated the financing for the deal.
Ngcaba, who was at Didata`s results presentation, where Ord was speaking, did not say anything about the Telkom transaction or his role in it.
Didata presented an improved set of results. Group turnover increased 18 percent to $2.48 billion (R14.8 billion) and there was a return to operating profitability, with the company pulling itself back from an operating loss of $9 million last year to a profit of $33 million for the year to September.
But exceptional items and goodwill amortisation of more than $49 million pushed the company into a net loss for the year of $37.8 million.
One analyst said it was disappointing still to see restructuring costs and goodwill impairment on the income statement.
The largest exceptional item was related to Didata`s large headquarters in Bryanston, Johannesburg, which is known as the Campus. It was built three years ago when Didata was retrenching heavily and office space was in oversupply.
Didata is leasing the property at an interest rate of more than 16 percent. In order to convert the property eventually into an asset for the group, Alan Cawood, the local chief executive, said Didata had negotiated to buy the deeds.
The Campus would be capitalised next year at a fair value of $135 million. In yesterday`s results, Didata incurred a $25 million provision on it.
Gavin Joubert, a portfolio manager at Coronation Fund Managers, said that progress had clearly been made but one key point of concern was that with good revenue growth the business had produced an operating margin of only 1.1 percent.
Global chief executive Brett Dawson said he recognised that the return was not adequate and the focus for 2005 would be on growing revenues and improving returns.
The group`s long-term liabilities were stable at just over $133 million, while cash on hand rose 10 percent to $425 million.
Dawson said some cash would be used in South Africa for subsidiary Internet Solutions to start providing voice services as early as February, regulations allowing.
Didata shares rose 15c to close at R3.45 yesterday. The software and computer services sector gained 1.9 percent.
