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Datacentrix boosts bottom line

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 20 Apr 2015
Datacentrix will continue to invest in cloud technology.
Datacentrix will continue to invest in cloud technology.

Datacentrix has grown its earnings 16.4% from R89 million to R103 million in the year to February, even as revenue declined by R30 million.

The company, which published its results this evening, also noted headline earnings per share increased 16.2% to 53c, and its operating margin increased from 5.5% to 6.4%.

Datacentrix generated cash from operations of R199 million and has cash on hand of R291 million, with no interest-bearing debt related to operations. It declared a final annual gross cash dividend declared of 17.55c a share.

Datacentrix used the cash it earned to settle finance leases and payments on previous acquisitions (R21.2 million), purchasing assets in the normal course of business (R23 million), returns to shareholders (R31.8 million) and tax obligations (R38.1 million).

In its results commentary, Datacentrix says revenue was essentially sustained at R2.25 billion on the back of constrained spending experienced in the private sector. It notes it maintained "sound financial and operational disciplines".

The company adds it has secured new three- to five-year contracts to the value of about R500 million. "The revenue from these transactions will start to materialise in the new financial year."

In addition, its Managed Services division extended expiring contracts valued in excess of R300 million. "The integrated nature of these solutions will benefit both the Managed Services and Technology divisions. The recent contract wins and extensions bode well for the business."

Datacentrix, which has agreed buy Pinnacle Holdings' Infrasol and Merqu Communications businesses for R85 million, adds it plans to accelerate its acquisition strategy and will focus on seeking out suitable acquisition opportunities to complement current offerings, creating economies of scale in existing business areas and bringing new solutions to market in areas such as Managed Services and Business Solutions.

It will also continue to invest in cloud technology as this area experiences increased adoption in the market.

The Managed Services division contributed 45% to group earnings; 44% was attributable to the Technology division and 11% to the Business Solution division.

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