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Datacentrix shows strong growth for four-month period to end June 2016

Integrated ICT systems provider, Datacentrix has announced its financial results for the four-month period ended 30 June 2016, in line with its announcement earlier this year that the organisation would change its year-end from 28 February to 30 June.

For this period, the Group is pleased to announce that it achieved revenue of R961.7 million and earnings attributable to shareholders of R41.1 million. Earnings per share and headline earnings per share were 21.0 cents.

“Datacentrix delivered a strong performance over the past four months, despite challenging market conditions,” says Ahmed Mahomed, Datacentrix CEO. “The change in financial year-end has made direct financial comparisons difficult. However, by extrapolating a four-month equivalent utilising the last published six-month average, the comparison indicates that revenue and operating profit grew by 18% and 17% respectively.”

The Group saw revenue growth from all three divisions – namely Managed Services, Technology Solutions and Business Applications – with new-term deals concluded over the past four months set to flow into the new financial year.

“Revenue contribution from the broader African continent increased, largely due to the demand for our solutions from existing customers moving into the region.”

The Managed Services division contributed 39.5% to Group profit after tax (PAT), achieving an operating margin of 10.2%. Based on a four-month extrapolated average, the division increased revenue by 21% and earnings by 27%. During the period, the division demonstrated strong growth specifically in its Internet and network services, as well as its ICT facility services and outsourcing businesses. “Solid performance was achieved within the outsourcing space with new outsource deals being transitioned. Improved service delivery and efficiencies have enhanced the division’s ability to address customer needs more cost effectively and efficiently.”

The Technology Solutions division produced revenue of R680 million; PAT of R19.4 million; and contributed 47.1% to Group PAT for the period. Based on a four-month extrapolated average, the division increased revenue and earnings by 17% and 16% respectively. Technology Solutions increased its revenue from longer-term service delivery projects; kick-started the year with the formalisation of a number of complex, longer-cycle deals; focused on managing costs; and ensured a high repeatability of service delivery in the face of a slower economy.

The Group upgraded its security operations centre and enhanced its execution capability in the security business during the period under review. Management is encouraged by the opportunities in this area of the market and is well positioned to capitalise on these.

The Business Applications division achieved PAT of R4.1 million and contributed 9.9% to Group earnings for the period. The division, based on a four-month extrapolated average, increased revenue by 10% and grew earnings by 9%.

The Enterprise Information Management (EIM) business delivered a strong performance – it closed out one of its large projects in the education domain, signed up a substantial enterprise licence agreement in the public sector, rolled out the initial project phase for a regional healthcare provider and acquired new business across various industries. The Enterprise Resource Planning (ERP) business performance improved for the period. Finally, the Business Intelligence and Analytics capability has now been fully integrated into the broader EIM offering.

“Datacentrix will continue to develop its service-focused culture and solution flexibility, allowing customers to grow or shrink their service requirements and expenditure in line with the demands of their business,” Mahomed states. “At the same time, we’re focused on our people; being an employer of choice, recruiting and retaining top skills, and ensuring that the right people are executing effectively the first time, every time for the Group. Our skills development initiatives, including the internship programme, are not only a social imperative, but also help to provide new talent for the business, adding expertise to the scarce IT skills pool.

“Datacentrix is a more cohesive, more reliable, and stronger IT partner. We are extremely focused on the fundamental principles of business, namely quality skills, leading vendor partnerships, sound financial management, resilient operations, strong technical and execution capabilities, and an ongoing commitment to black economic empowerment imperatives.”

The Group adapts continuously to the changing technology and business environments and will maintain its strategy to expand both organically and through acquisitions that can broaden its reach and bring new solutions to market.