Datacentrix, a provider of high performing and secure information technology (IT) solutions, has announced positive annual financial results for the year ended 29 February 2012, reflecting the company's transformation from a largely single vendor, product and transactional business to one that is a solutions and services-led integrator.
The group showed organic revenue growth of 11.6% from R1.576 billion to R1.758 billion, creditable growth in light of windfall earnings flowing from the once-off FIFA World Cup event in the previous financial year.
Profit after tax (“PAT”) showed a nominal increase at R90.8 million for the year, due to a decline in EBITDA (earnings before interest and taxes) margins from 9.5% to 8.3%. The group margin was affected by higher expenditure relating to additional resource investment in new competencies. This includes investments in resources in infrastructure security and networking competencies, capital investment in IT infrastructure and a new Security Operation Centre (SOC), one of only two of its kind in South Africa.
According to Datacentrix CEO, Ahmed Mahomed, changing market conditions necessitated the transformation of the business to a solutions and services-led integrator. “This strategy has led to the growth of new revenue streams, which helped preserve what would otherwise have been a rapidly declining revenue base.
“The Infrastructure division contributed 48% to group PAT, while the Managed Services and Business Solutions divisions added 31% and 18% respectively. The contributions by the Managed Services and Solutions divisions now account for half of group PAT,” he says.
The Infrastructure division remains the largest and premier certified HP partner in the local market, and is seen as a sizeable HP player, not only in South Africa, but also the Middle East, Mediterranean and Africa (“MEMA”) region. HP attested to this fact when Datacentrix was recently awarded seven different accolades by the company.
The division is among the top three IBM local business partners and has currently one of the highest skilled business partners from a services perspective.
Within the Infrastructure division, the private sector continues to make good inroads and gained a number of new blue chip clients over the past year.
“Public sector activity continues to be challenging and has had an adverse effect on divisional profitability,” states Mahomed. “The group's view is to maintain its investment in resources in this area in order to benefit optimally from IT spend as it may arise.”
The Outsourcing and Resourcing business units showed healthy double-digit growth for the financial year, contributing to the group's revenue diversification strategy.
“The Managed Services division is committed to delivering solutions that enable its clients to use technology as a strategic asset in achieving business objectives, while at the same time, reducing cost and risk.”
The Business Solutions division also showed double-digit growth, supported by good performances in the enterprise content management (ECM) and the business intelligence (BI) sectors.
Looking ahead, Mahomed maintains that market consolidation will continue, attested to by the numerous recent acquisitions by both HP and IBM.
Datacentrix's transition into a services-led solutions integrator is set to continue over the next year. The company is already offering, and has been recognised for its capability in deploying, cloud infrastructure, recently winning one of the larger e-mail cloud opportunities in the market. As cloud technology matures, the group will continue to investment in both “white label” cloud solutions and building its own cloud infrastructure.
“The IT landscape is highly competitive from a skills perspective due to a scarcity,” he continues.
“Datacentrix has set up a learnership programme aimed at both school leavers and those with basic IT qualifications. The group is also seeking out unemployed graduates, with the relevant qualifications, in order to provide permanent employment and develop specialised skills.”
In respect of the current year, the directors declared a final gross dividend of 19.53 cents, which is a departure from its policy of two times headline earnings per share.
Share
Editorial contacts