Datacentrix, unable to find a suitable acquisition, has opted to distribute excess cash to its shareholders.
"Having spent the last three years or so actively looking for acquisitions, and having had a look at most opportunities, the company has decided that attractive opportunities are few and far between," says executive chairman Gary Morolo.
"The available deals either did not fit Datacentrix`s strategy or value expectation, or would have required significant turnaround.
"Henceforth the company is no longer actively on an acquisition campaign but will continue to focus on opportunistic bolt-on acquisition opportunities. This approach has the added advantage that the company is unlikely to indulge its corporate ego with reckless bets or acquisitions too large and too complex to integrate effectively."
The Datacentrix board has proposed a maiden capital distribution of 6.9c a share and Morolo says the company will pay annual dividends, with the intention of maintaining a three times earnings cover dividend policy.
Revenue for the year to end-February was down 1% from R770.74 million to R763.78 million, while earnings before interest, tax, depreciation and amortisation slipped from R58.32 million to R57.16 million. Attributable earnings fell from R36.92 million to R31.75 million.
After the application of the AC133 accounting standard, headline earnings per share fell to 20.7c from 22.9c a year before.
Unusual
"Financial year 2003/04 has been unusual for Datacentrix," Morolo says. "For the first time since listing the company is not able to reflect in its results the steady annual growth in excess of 30% that the market has become accustomed to.
"Ironically, while it has been a challenging business environment for IT companies, for Datacentrix it has been no more challenging than it has been for the last three to four years since the post-Y2K slump.
"The performance of the company, its competitive profile, delivery capacity and its prospects have not changed materially. The only difference has been the change in the value of the currency relative to the US dollar between the two operating periods. Given a constant rand in dollar terms, Datacentrix would have been presenting another pleasing set of results."
Morolo says the group`s strategic focus remains unchanged, with expected growth areas encompassing enterprise systems and the Johannesburg market.
"2004 should mark the start of a number of sizeable 'refresh` projects worldwide as organisations start to upgrade equipment implemented during the Y2K boom.
"With a number of long outstanding government tender evaluations finally resolved in Datacentrix`s favour, the company expects significant growth from this sector as well."
Datacentrix has also announced that it has separated the roles of chairman and CEO, with Morolo retaining the executive chairmanship and MD Gerhard Uys taking the CEO post.
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