Organic growth and global moves to IP-based networks delivered 22% growth in revenues and doubled earnings per share in its half-year to end March, says Dimension Data.
Speaking yesterday to analysts in London, Cape Town and Johannesburg, group CEO Brett Dawson said the company's fundamentals were all moving "decidedly in the right direction".
Included in the financial statements is a change in the classification of the Campus property in Johannesburg from an operational investment to an investment property. While the rental benefits of this change are expected to be replicated in future periods, DiData has presented these as an exceptional item in the current reports.
The company's interim results see revenue growth of 22.2%, to $1.8 billion (R12.4 billion), off $1.4 billion in the same period the previous year. Earnings per share (EPS) for the period increased 10.5%, from 1.9 US cents (R0.13) to 2.1 US cents. However, with exceptional items excluded, EPS doubled to 1.8 US cents (R0.12).
Operating profit, including exceptional items, increased 40%, to $48 million (R331 million) from $35.6 million, representing a 2.7% margin. With exceptional items excluded, operating profit climbed 50%, to $55 million (R379.5 million), representing a 3.1% margin.
Africa leads
DiData's regional report sees Europe contributing $470 million in revenues, followed by Africa with $388 million. Asia, Australia and the US produced $273 million, $359 million and $277 million, respectively.
<B>Fast figures:</B>
DiData interim results to end-March
Year-on-year figures in brackets
Revenue: $1.8bn ($1.4bn)
Pre-tax profit: $56.6m ($28.7m)
Net profit: $42m ($37.7m)
EPS: US 2.1c (US 1.9c)
Diluted EPS: US 2c (US 1.8c)
Cash-on-hand: $357m ($347m)
Current assets: $1.4bn ($1.2bn)
Current liabilities: $1bn ($880m)
However, the Africa region delivered more than half of DiData's $55 million operating profit, with $37 million.
Company CFO David Sherriffs explains this is due to mix and appetite: "Unlike our other regions, Africa receives more revenue from services than it does products. And services generally enjoy higher margins. Our Africa operations are also more mature than our other regions due to the depth in offerings that we have built up over the years. Finally, we have such a well-established market presence on the continent that we are able to generate better margins."
Spring back
Although Dawson and Sherriffs told analysts that DiData's outlook is positive, they did warn that it would be overly aggressive to expect similar growth rates in upcoming periods.
"Delivering 22% organic growth was really good; however, we believe this was a catch-up on last year's performance. Also, we have set a new and larger base to grow on. We believe a compound annual growth rate of 16% is quite good," explained Dawson.
As for operating margin, Dawson said the company is still aiming for 5% in the next three to five years announced at year end.
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