DiData beds down turnaround

Johannesburg, 15 Nov 2006

While its primary strategy is organic, Dimension Data has benefited from acquisitive growth during the year, it says.

The London- and Johannesburg-listed company this morning reported its annual results to end-September, noting it had turned around the operation from a loss-maker in 2003 to record profit. It said it would pay out a dividend of one US cent.

CEO Brett Dawson said the company's core focus in 2003 was to "stop the bleeding" and turn the bottom line around. At that stage, the company was not interested in any acquisitions.

However, since returning to a level of competitive strength, the company had been "quietly" taking over small firms and expanding geographically. While believing Africa is vital in going forward and having entrenched its position on the continent, future growth will be more organic-based.

DiData reported revenue of $3.1 billion for the year, up from last year's $2.65 billion. Operating profit moved up 50%, to $85 million, from $56.7 million, while pre-tax profit was 66% higher.

Bigger margins expected

CFO Dave Sherriffs said the revenue growth this year was 16% and Dawson added double-digit revenue growth going forward is likely to be seen in the medium-term. He said the company expected to see margins expanding over the next few years, and aimed to hit 5% in the next three years.

In the first half of the year, the organisation acquired the remaining 20% stake in Internet Solutions, which it said was an important asset and vital in entrenching its African position.

Elsewhere on the continent, it also purchased the remaining 51% in telecom solutions provider Plessey and established an East African regional presence by acquiring a 51% stake in ICL East Africa.

"In Africa, the acquisition of the remaining stakes in Plessey and Internet Solutions provided the platform for the group to benefit from its comprehensive range of IT services across the African continent," it said in its results.

"Demand in the traditional South African enterprise market was strong, with particular support for our converged communications solutions. We experienced very good growth in the public sector, as well as in new markets in East and West Africa."