Dimension Data announced today that its turnover will be flat for the first half of the year. However, the group says international markets have stabilised and prospects for the rest of the year appear healthier than at the end of 2001.
As part of the JSE- and London-listed company`s strategy to keep the market up to date with happenings, the multinational today released a trade update before it enters its closed period leading to its announcement of interim financial results in May.
The group says trade for the first six months has taken place against a backdrop of continued difficult market conditions.
Turnover for the period excluding the impact of depreciation is expected to be flat sequentially, although within budget.
The group is expecting the weaker rand to have around a 5% impact on its turnover for the period.
Overheads are expected to be within the previous guidance, although gross margins are expected to be 0.5% down due to lower than expected business levels in its e-business and contact centre agency divisions.
Management says the first six months will still bear the brunt of the slowdown in Asia and the US, but more recently trading has stabilised, and DiData says its back orders and prospects are better than they were at the end of last year.
The group expects these positive signs to translate into revenue growth for the second half of the year, although the company warns that gross margins are expected to remain at a similar level to the first six months.
Overheads for the year are expected to come in at a predicted $460 million.
Jeremy Ord, executive chairman, says: "We continue to make progress with our stated strategy of globalising our services- and solutions-based model. This approach has been endorsed by significant customer wins in each of our regions that clearly demonstrate our ability to provide a unique and compelling blend of services and technology.
"Encouragingly, these contracts are long-term and provide us with a platform to sell further services within these clients."
The markets responded positively to the update and the company`s share price was trading up 10% by midmorning at 1 100c. How much of this is attributable to the buoyant day`s trade on the Nasdaq yesterday remains to be seen.
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