Datacentrix on the prowl

By Iain Scott, ITWeb group consulting editor

Johannesburg, 03 Oct 2007

Datacentrix, which has in the past eschewed acquisitions in preference for organic growth, says it has identified some takeover targets, and will continue to seek out other potential acquisitions.

Speaking at the group's interim results for the six months to end-August yesterday, COO Ahmed Mahomed said the group had identified some opportunities for acquisitions.

Mahomed said the acquisitions would be small ones - "You won't see us trying to buy a BCX" - and emphasised that the growth strategy would remain primarily organic.

The group had cash of R207.26 million on its balance sheet at the end of August, but Mahomed said purchases would be made through a combination of cash and shares.

"In the last few years we have stated very explicitly that our growth strategy is not acquisitive - we will grow organically," said chairman Gary Morolo. "This is the first time you have heard us in a number of years say that we are now going to look at some form of acquisition. Even then we are looking at small pockets of acquisitions."

Remain conservative

He said the key was to find organisations with critical skills that could be brought on board and which could be bolted onto existing operations.

"You know we are conservative. You know we are not going to be frittering your money away," he told investment analysts.

CFO Liz Naidoo said that of the group's R693 million revenue, R658 million (2006: R568 million) was generated by the infrastructure and related services segment, while solutions generated R35 million (R36 million) in revenue.

Infrastructure and related services generated R52 million (R38 million) of net profit before interest and tax, while solutions contributed R9.7 million (R6.7 million).

The Datacentrix share closed 8c, or 1.6%, up at R5.10 on the JSE yesterday. By midmorning trade today, it had gained another 20c, or 3.9%, to trade at R5.30.