| Tue 3 Oct 2006, 13:00 | | Datacentrix - Unaudited interim results: six mont |
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DCT
DCT
Datacentrix - Unaudited interim results: six months ended 31 August 2006
and dividend declaration
DATACENTRIX HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER: 1998/006413/06)
JSE CODE: DCT
ISIN: ZAE000016051
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2006
Key Financial Indicators:
- Revenue increased 47%
- EBITDA increased 98% to R50 million
- Headline earnings per share (HEPS) increased 91% to 14.5 cents
- Earnings per share (EPS) increased 166% to 14.1 cents
- Cash generated from operations of R56m resulting in cash
on hand of R145 million
- Interim dividend of 7 cents per share declared
ABRIDGED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 AUGUST
2006
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28
2006 2005 February
R"000 R"000 2006
Restated R"000
Revenue 604 262 411 320 1 034 397
Operating profit 44 112 15 530 70 430
Net interest received 5 708 4 796 7 856
Profit before taxation 49 820 20 326 78 286
Income tax expense (22 150) (9 902) (28 341)
- normal taxation (14 452) (7 593) (26 032)
- secondary taxation on companies (7 698) (2 309) (2 309)
Profit for the period attributable to 27 670 10 424 49 945
ordinary shareholders
Earnings before interest, taxation, 50 030 25 244 88 661
depreciation and amortisation (EBITDA)
Basic earnings per ordinary share 14.1 5.3 25.5
(cents)
Diluted basic earnings per ordinary 13.8 5.1 24.9
share (cents)
Headline earnings per ordinary share 14.5 7.6 28.7
(cents)
Diluted headline earnings per ordinary 14.1 7.3 27.9
share (cents)
Dividend per share (cents) 7.0 - 30.0
Weighted average number of shares in 195 647 195 945 195 647
issue (000s)
Weighted average number of shares in 200 565 203 344 200 713
issue for purposes of dilution (000s)
Reconciliation between profit for the
period attributable to ordinary
shareholders and headline earnings
Profit attributable to ordinary 27 670 10 424 49 945
shareholders
Goodwill impaired 662 4 502 7 857
Profit on sale of subsidiary - - (74)
Profit on sale of investment property - - (1 671)
Headline earnings 28 332 14 926 56 057
RESTATEMENTS
Previously Restatements Restated
stated R"000 2005
2005 R"000
R"000
Net profit 12 349 (1 925) 10 424
- Operating profit 23 022 (2 696) 20 326
- Taxation (10 673) 771 (9 902)
ABRIDGED CONSOLIDATED BALANCE SHEET AT 31 AUGUST 2006
Unaudited Unaudited Audited
31 August 31 August 28 February
2006 2005 2006 R"000
R"000 R"000
Restated
ASSETS
Non-current assets 74 547 69 330 68 194
Property and equipment 30 322 29 893 31 217
Software 933 886 751
Goodwill 15 595 21 524 16 257
Investment in joint venture 290 - -
Deferred tax assets 21 955 17 027 12 739
Long term receivables 5 452 - 7 230
Current assets 328 429 298 299 381 947
Inventories 33 429 7 544 4 836
Trade and other receivables 149 756 119 498 211 496
Assets classified as held for sale - 2 289 -
Cash and cash equivalents 145 244 168 968 165 615
TOTAL ASSETS 402 976 367 629 450 141
EQUITY AND LIABILITIES
Capital and reserves 212 767 207 626 244 347
Share capital 21 20 21
Share premium 40 735 39 074 40 311
Treasury shares (22 983) (14 682) (20 203)
Equity settled share scheme 6 842 3 559 5 042
Retained earnings 188 152 179 655 219 176
Non-current liabilities 26 207 13 404 19 746
Obligations under finance leases 2 849 - 4 205
Deferred revenue (long-term portion) 23 358 13 404 15 541
Current liabilities 164 002 146 599 186 048
Trade and other payables 110 892 98 831 136 423
Provisions 16 974 23 346 26 611
Deferred revenue on contracts (short- 17 987 14 027 17 590
term portion)
Lease liabilities 263 180 300
Current tax liabilities 17 885 10 215 5 124
TOTAL EQUITY AND LIABILITIES 402 976 367 629 450 141
Net asset value per share (cents) 108.8 106.0 124.9
Tangible net asset value per share 100.3 94.5 116.2
(cents)
Number of shares in issue (adjusted 195 647 195 945 195 647
for treasury shares) (000s)
Restatements Previously Restateme Restated
stated nts 2005
R"000 R"000 R"000
- Property, plant and equipment 26 532 3 361 29 893
- Deferred tax assets 12 752 4 275 17 027
- Inventories 10 544 (3 000) 7 544
- Retained earnings 190 109 (10 454) 179 655
- Current tax liabilities 10 110 105 10 215
- Provisions 8 524 14 822 23 346
- Lease liability 17 163 180
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS
ENDED 31 AUGUST 2006
Share Share Treasury Equity Retained Total
capital premium shares settled earnings R"000
R"000 R"000 R"000 share R"000
scheme
reserve
R"000
Balance at 28 20 39 589 (14 060) 1 735 186 866 214 150
February 2005
restated
Profit for - - - - 10 424 10 424
the period
Treasury - - (622) - - (622)
shares
movement
Share issue - (10) - - - (10)
expenses
Share based - - - 1 824 - 1 824
payments
Dividend paid - - - - (17 635) (17 635)
Loss on sale - (505) - - - (505)
of treasury
shares in
trust
Balance at 31 20 39 074 (14 682) 3 559 179 655 207 626
August 2005
restated
Profit for - - - - 39 521 39 521
the period
Raised on new 1 912 - - - 913
acquisitions
Treasury - - (5 521) - - (5 521)
shares
movement
Share based - - - 1 483 - 1 483
payments
Profit on - 325 - - - 325
sale of
treasury
shares in
trust
Balance at 28 21 40 311 (20 203) 5 042 219 176 244 347
February 2006
Profit for - - - - 27 670 27 670
the period
Treasury - - (2 780) - - (2 780)
shares
movement
Share based - - - 1 800 - 1 800
payments
Dividends - - - - (58 694) (58 694)
paid
Profit on - 424 - - - 424
sale of
treasury
shares in
trust
Balance at 31 21 40 735 (22 983) 6 842 188 152 212 767
August 2006
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT FOR
THE SIX MONTHS ENDED 31 AUGUST 2006
Unaudited 6 Unaudited Audited
months ended 6 months 12 months
31 August ended 31 ended 28
2006 August 2005 February
Restated 2006
R"000 R"000 R"000
Income before taxation 49 820 20 326 78 286
Adjusted for non-cash items 2 632 9 518 11 894
Working capital changes 3 604 3 094 (37 678)
- Inventory (28 593) (779) 2 031
- Receivables 60 134 (3 382) (88 545)
- Payables (27 937) 7 255 48 836
Cash generated from operations 56 056 32 938 52 502
Net interest received 5 708 4 796 7 856
Dividend paid (58 694) (17 635) (17 635)
Taxation paid (18 605) (11 250) (30 492)
Net cash (outflow) inflow from (15 535) 8 849 12 231
operating activities
Net cash outflow from investing (847) (5 474) (13 797)
activities
Net cash (outflow) inflow from (3 989) (1 552) 35
financing activities
Net (decrease) increase in cash (20 371) 1 822 (1 531)
and cash equivalents
Cash and cash equivalents at 165 615 167 146 167 146
the beginning of the period
Cash and cash equivalents at 145 244 168 968 165 615
the end of the period
Commentary
The directors of Datacentrix Holdings Limited present the unaudited interim
financial results of the group for the six months ended 31 August 2006.
The board is pleased to announce that the company produced exceptional
interim results which included a revenue increase of 47% to R604 million.
This was attained during a period of price deflation and a marginally
positive effect of the depreciation of the rand against the major
currencies. Operating margins have been maintained, costs have been
contained and EBITDA increased by 98% to R50 million. Profit for the first
half was R27,7 million (after accounting for an additional STC charge of
R7,7 million) compared to R49,9 million earned for the full previous
financial year. The company"s ability to convert profit to cash remains a
highlight with cash generated of R56 million for the period. The resultant
cash on hand is R145 million after the payment of R66 million final and
special dividend relating to the previous financial year. Basic earnings
per share increased by 166% and headline earnings per share by 91%.
Basis of Preparation
These results have been prepared in accordance with International
Accounting Standard IAS 34: Interim Financial Reporting, applicable to
financial reporting, the Listing Requirements of the JSE Limited and
schedule 4 of the Companies Act of South Africa. The accounting policies of
the group which comply with International Financial Reporting Standards
(IFRS) have been consistently applied to these results and are the same as
applied to the results at 28 February 2006.
Restatements in terms of IFRS
As previously communicated in our annual financial statements for the year
ending 28 February 2006:
The depreciation on spare parts recognised in prior periods was found to be
overstated and was adjusted accordingly. The impact related to the opening
retained income for the February 2005 financial year as opposed to the six
months to August 2005.
An amount of R14,850 million was provided for in lieu of share options,
which were cancelled. The effect on the profit of the group for the six
months to August 2005 was nil. The effect on opening retained income for
the year was R10 million.
Infrastructure and Related Services
We continue to be a dominant player in the supply, deployment, maintenance
and support of IT infrastructure solutions. In the period under review we
showed exceptional growth, had significant wins, and retained all our major
customers. We received six of the eight categories of HP"s partner-of-the-
year awards and were runner-up in the remaining two categories.
We experienced strong performance from all market segments, most notably
from the government sector, enterprise systems and selective outsourcing
business. The division"s strategic focus remains unchanged, with expected
growth areas in all parts of the business. Datacentrix continues to ensure
that the group is accredited by its vendors at the highest possible
procurement and 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" customer centric approach and continued high service levels to
customers have ensured that all our major customers have been retained and
we have attracted a number of additional blue chip customers. Our continued
expansion of our service offering has also enabled us to provide more
services to existing customers, further enhancing our strategic value to
them as a single source service provider. Datacentrix" innovative approach
to selective outsourcing has enabled the company to win and implement a
number of multi-year contracts.
Solutions
The ERP business unit overcame the challenges encountered during the
previous year. We remain focused on Microsoft"s Business Solutions as a
gold certified partner. Improved contract and project management and
implementation methodologies have been employed successfully. Client
relationships have been strengthened and service delivery enhanced.
Management remains confident that these turnaround activities have improved
the efficiencies of the business and look forward to future contributions
by the business unit to the growth in earnings.
The Development and Integration business unit has won major projects in the
areas of workflow and data-mining during the year. The Optimisation
business unit serving in the electronic content management and archiving
areas has performed creditably.
Black Economic Empowerment (BEE)
Datacentrix continues to rank very satisfactorily in independent BEE
surveys (Empowerdex 2006: "A" rating). The company continues to focus
strongly on internal transformation imperatives and also participates
actively in the ICT forums to promote transformation.
The board"s objective remains to facilitate the required transformation in
terms of the DTI equity ownership guidelines. The board is eager to
finalise the shareholding and capital structure changes, but to achieve
best compliance with the codes. The board will conclude its activities once
the codes of broad based practice are finalised.
Prospects
The board remains positive about the prospects of the company for the
balance of the year. Datacentrix continues to be a strong and vibrant
company and will continue to maintain its strong balance sheet and will
pursue all possibilities to achieve a more efficient capital structure. Our
tight operational and financial controls, strong customer and partner focus
and performance-driven culture continue to make it an ideal choice for
vendors and customers looking for a long-term strategic partner.
Dividend
The directors announce an enhancement of the current dividend policy of two
times cover on HEPS by the introduction of an interim dividend. The board
has approved an interim dividend of 7 cents per share.
Last day to trade: Friday, 20 October 2006
Share trade ex dividend: Monday, 23 October 2006
Record date: Friday, 27 October 2006
Payment date: Monday, 30 October 2006
Share certificates may not be dematerialised or rematerialised between
Monday, 23 October 2006 and Friday, 27 October 2006, both days inclusive.
Board composition
Christoff Botha, who has been a non-executive director since 1998, has
resigned with effect from 2 October 2006 in order to focus on his interest
in the firm Treacle Private Equity. The board thanks Christoff for his
invaluable contribution.
For and on behalf of the Board:
Gary Morolo
Chairman
3 October 2006
Directors: Gary Morolo (Chairman)*, Gerhard Uys (CEO), Ahmed Mahomed,
Alwyn Martin*, Charl Joubert, Elizabeth Naidoo, Imogen Mkhize*, Joan
Joffe*, Klaas Lammers, Stewart Barker, (*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: 03/10/2006 01:00:10 PM Produced by the JSE SENS Department
