| Tue 5 Apr 2005, 15:01 | | Reviewed Results For The Financial Year Ended 28 |
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Datacentrix Holdings Limited - Reviewed Results For The Financial Year Ended 28
February 2005
DATACENTRIX HOLDINGS LIMITED
REGISTRATION NUMBER: 1998/006413/06
SHARE CODE: DCT
ISIN CODE: ZAE 000016051
REVIEWED RESULTS FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2005
Key Financial Indicators
* EBITDA increased 40% to R80.2 million
* Headline earnings per share (HEPS) increased 31% to 27.1 cents
* Earnings per share (EPS) increased 40% to 22.8 cents
* Cash generated from operations of R97.5 million, resulting in R167 million
cash on hand, with no interest-bearing debt
* A dividend of 9.0 cents per share is proposed
Consolidated Income Statement for the year ended 28 February 2005
Reviewed Audited
2005 2004
R`000 R`000
Revenue 897 491 763 782
Earnings before interest, taxation, depreciation and 80 222 57 162
amortisation (EBITDA)
Depreciation (7 611) (6 038)
Amortisation of intangibles (9 944) (9 931)
Operating income before interest and taxation 62 667 41 193
Net interest received 5 764 10 476
Deemed interest (AC133 fair value adjustment) (87) (1 243)
Income from associate 472 343
Income before taxation 68 816 50 769
Taxation (24 157) (19 023)
Earnings attributable to ordinary shareholders 44 659 31 746
Headline earnings per ordinary share (cents) 27.1 20.7
Diluted headline earnings per ordinary share 26.1 19.9
(cents)
Basic earnings per ordinary share (cents) 22.8 16.3
Diluted basic earnings per ordinary share 21.9 15.7
(cents)
Capital distribution per share (cents) - 6.9
Proposed dividend per share (cents) 9.0 -
Weighted average number of shares in issue 195 801 195 024
(000`s)
Weighted average number of shares in issue for 203 618 202 628
the purposes of dilution (000`s)
Reconciliation between earnings attributable to ordinary shareholders
and headline earnings
Earnings attributable to ordinary shareholders 44 659 31 746
Goodwill amortised 8 471 8 672
Profit on sale of property and equipment (75) -
Headline earnings 53 055 40 418
Consolidated Balance Sheet as at 28 February 2005
Reviewed Audited
2005 2004
R`000 R`000
ASSETS
Non-current assets 65 918 59 658
Property and equipment 25 002 11 938
Investment property 2 332 -
Intangible assets 25 006 34 384
Investment in associate 1 413 1 233
Advance payments - 3 050
Deferred taxation 12 165 9 053
Current assets 295 386 258 821
Inventories 12 124 11 707
Accounts receivable 116 116 116 092
Bank balances and cash 167 146 131 022
TOTAL ASSETS 361 304 318 479
EQUITY AND LIABILITIES
Capital and reserves 222 457 193 768
Share capital 20 20
Share premium 39 589 50 831
Treasury shares (14 060) (11 078)
Acquisition consideration (shares) due to - 1 746
vendors
Distributable reserves 196 908 152 249
Non-current liability
Acquisition consideration (long-term cash) - 833
due to vendors
Current liabilities 138 847 123 878
Accounts payable and accruals 82 388 82 258
Provisions 13 299 8 343
Deferred revenue on contracts 32 103 19 905
Acquisition consideration (short-term 920 11 098
cash) due to vendors
Taxation 10 137 2 274
TOTAL EQUITY AND LIABILITIES 361 304 318 479
Net asset value (adjusted for treasury shares) per 116 103
share (cents)
Tangible net asset value (adjusted for 104 85
treasury shares) per share (cents)
Actual number of shares in issue (000`s) 204 130 199 863
Consolidated Statement of Changes in Equity for the year ended 28 February 2005
2005 2004
R`000 R`000
Opening balance 193 768 160 924
Net income for the year 44 659 31 746
Share issue expenses (26) (86)
Profit on sale of treasury shares held in 482 102
share trust
Treasury shares - movement during the year (2 982) (943)
Capital distribution (13 444) -
Raised on new acquisitions - 2 025
Closing balance 222 457 193 768
Consolidated Cash Flow Statement for the year ended 28 February 2005
Reviewed Audited
2005 2004
R`000 R`000
Income before taxation 68 816 50 769
Adjusted for non-cash items 11 813 6 495
80 629 57 264
Working capital changes 16 843 (13 709)
- Inventory (417) (1 304)
- Receivables (24) 4 792
- Payables 17 284 (17 197)
Cash generated from operations 97 472 43 555
Net interest received 5 764 10 476
Capital distribution (13 444) -
Taxation paid (19 262) (25 959)
Net cash inflow from operating activities 70 530 28 072
Net cash outflow from investing activities (20 299) (7 380)
Net cash outflow from financing activities (14 107) (7 454)
Net increase in cash and cash equivalents 36 124 13 238
Cash and cash equivalents at the beginning 131 022 117 784
of the year
Cash and cash equivalents at the end of the 167 146 131 022
year
The prior year financial position and results have been amended for the
reclassification of provisions and intangible assets.
Nature of Business
Datacentrix operates as a technology reseller and solution provider. Its major
activities comprise the supply, integration and optimisation of IT
infrastructure, business solutions and related services to enterprise South
Africa.
Commentary
The directors of Datacentrix Holdings Limited present the reviewed annual
financial results of the group for the year ended 28 February 2005. The
directors are satisfied with the results and believe that they are creditable in
a challenging market, which is continuing to consolidate. The company has
achieved growth in revenue, despite the continuing deflation of IT product
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 choice for vendors and customers looking for a long-term
strategic partner.
Accounting Policies
The preliminary financial statements of the group are prepared as a going
concern on a historical cost basis, except for certain financial assets and
liabilities that are measured on a fair value basis in terms of AC133 -
Financial Instruments: Recognition and Measurement. These financial statements
conform to the South African Statement of Generally Accepted Accounting
Practice, AC127 - Interim Financial Reporting. The principal accounting
policies have been consistently applied in all material respects.
Infrastructure and related Services
The Infrastructure division once again produced healthy organic growth in the
past financial year. The division continues to be a dominant player in the
supply, deployment, maintenance and support of IT infrastructure solutions. In
the period under review the division has had a number of significant wins,
heightened its technology partner accreditations, retained all its major
customers and renewed existing contracts. The division experienced strong
performance from all segments of the market, most notably from the coastal
region, government sector and software licensing business unit.
A key focus for 2004 was to strengthen our Johannesburg presence and Datacentrix
is now firmly entrenched within this sector, having secured strategic
relationships with a number of blue-chip organisations. The focus on the
Johannesburg market will continue in the new financial year and, to this end,
the division has grown its sales team appropriately. The logistics capability of
the company has been strengthened with the establishment of a hosting, logistics
and service centre in Midrand. The division`s strategic focus remains unchanged,
with expected growth areas encompassing managed print services, enterprise
solutions, networking, government spending and infrastructure refresh projects.
Datacentrix continues to ensure that the group is accredited by its vendors at
the highest possible technical level. This competency provides customers with
peace of mind that Datacentrix is a cost effective partner for the supply,
installation and maintenance of equipment over its entire lifecycle. Datacentrix
has embarked on a national drive to further align processes and procedures to
international standards, like ITIL, which provide a base for IT service
delivery. This focus ensured that customers received exceptional service levels
during the year under review.
In line with the stated objective of increasing selective outsourcing
agreements, a number of new customers were obtained during the year and although
sales cycles tend to be lengthy, the pipeline of opportunities is good. In
response to the market, which is showing a desire to purchase computing capacity
as opposed to its individual components, Datacentrix has branded a
product/service offering called Workspace, which is a cost effective packaged
solution for enterprise customers.
Solutions
The growth within Datacentrix Solutions has been fuelled by the market`s need
for ERP, archiving of data and documents, integration of dissimilar
applications, document management and workflow, business intelligence and the
move towards outsourcing of business applications. The result has been a number
of contracts awarded.
Datacentrix Solutions was again named Microsoft Business Solutions Partner of
the Year for 2004/2005 - the only partner locally to garner this award for two
consecutive years. Datacentrix Solutions has 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. The
division was also accredited as a Microsoft Gold Certified Partner, reinforcing
Datacentrix` expertise and position in the local market.
Black Economic Empowerment (BEE)
The company continues to rank very satisfactorily in independent BEE surveys,
notably the annual `Top Empowerment Companies, 2005` survey of all JSE-listed
companies, which was run by Financial Mail in partnership with Empowerdex.
Datacentrix remains in the top 10 most empowered of all listed companies and is
still ranked the top empowered IT company.
In order to enhance its BEE status, Datacentrix will address the requirements of
the DTI guidelines regarding broad based ownership, women ownership, and
unencumbered ownership. Accordingly, Datacentrix together with Aka Capital are
proactively addressing the need to introduce broad based BEE, including women
ownership. This will result in a dilution of the shareholding controlled by Aka
Capital, thus also achieving Aka Capital`s objective of remaining with a
substantial unencumbered shareholding in Datacentrix.
Future Prospects
Datacentrix` continued profitability is based on solid business model, focus on
business basics, its prudent and conservative management, and steadily improving
empowerment profile. The group`s strategic focus remains unchanged, with
expected growth areas encompassing ERP, selective outsourcing in both the
desktop and the server environment, managed print services and infrastructure
refresh projects. The company remains confident that it best represents the
ideal long-term strategic channel partner for vendors and customers. The
directors are optimistic about the group`s prospects, and wish to thank the
customers, business partners and staff for their dedicated and constructive
support over the past year.
Dividend
A dividend of 9.0 cents per share is proposed, representing three times cover on
HEPS, which is in line with the capital distribution of the prior year. Further
details relating to this dividend will be announced after the annual general
meeting.
Auditors` Opinion and Subsequent Events
The group`s auditors, Deloitte & Touche, have reviewed these results and a copy
of their unqualified review opinion 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 review report.
Board Composition
There were no changes to the composition of the board during the period under
review. In line with corporate governance requirements, the board is involved in
efforts to strengthen its composition. The board expects to make announcements
relating to the appointment of additional independent non-executive directors.
Annual General Meeting
It is expected that the Annual Report will be dispatched to shareholders no
later than 12 May 2005. Notice is hereby given that the annual general meeting
of the company will be held at the company`s registered office on 9 June 2005 at
10h00.
For and on behalf of the Board:
Gary Morolo
Executive Chairman
5 April 2005
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 (Pty) Ltd, 70
Marshall Street, Johannesburg
Sponsor: Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
Date: 05/04/2005 12:59:07 PM
