Datacentrix delivers - again

Johannesburg, 16 Apr 2008

JSE-listed ICT house Datacentrix continues to deliver value for shareholders a decade after its listing.

The company yesterday released its annual results for the year ended 29 February, reporting a 12% increase in revenue, to R1.35 billion; and a 29% growth in headline earnings, to R101 million. It proposes a full dividend of 26c per share.

Speaking to analysts, Datacentrix chairman Gary Morolo noted the company was pleased not to have suffered the same fate as many of the businesses that also listed in 1998.

"We are proud to have made it to this point. We have a solid business and see no reason to change our focus, or need to expand beyond our borders. However, there are a number of challenges that we face, particularly on the side of empowerment. We don't worry about this because we have to, we focus on transformation because we believe in its merits," he said.

CFO Liz Naidoo noted Datacentrix had achieved a compound annual growth rate (CAGR) on its revenue line of 31% since listing. Headline earnings per share had seen a CAGR of 27%.

Despite a reduction in business sentiment, new CEO Ahmed Mohammed said he had no reason to believe this would impact the company's performance into the new year.

"We are not seeing any indications of a slowdown in IT spend. Most of our offerings are positioned in the 'need' rather than 'want' requirements of business and the public sector. So we should be fine," he explained.

Mohammed commented that there were several focus areas that would enable the company to continue on its growth trajectory.

"Government infrastructure spend has always been a strong driver for us; this will continue going forward. In terms of Microsoft-related spend, I don't believe we've seen the full extent of the revenue coming from its new releases as yet. Growth on this side is not just on software, but on hardware upgrades too. Our new resourcing division is also starting to pay off. The scarcity of skills in this market will continue to boost its growth."

The only low point in this year's results is the revelation of a dispute with the South African Revenue Services (SARS) on its 2005 filings.

Naidoo explained the company had always chosen to declare full revenue when contracts are signed and enter a section 24c filling for future expenses related to these contracts.

"SARS is questioning our section 24c fillings from 2005. We are working with them and hope this will be resolved positively. In the meantime, however, we are holding aside R7.5 million for the full liability," she said.