Dimension Data`s operating profit is showing strong growth, as the group announces plans to grow into Africa and participate in the new voice over IP (VOIP) wave.
In announcing the company`s interim results for the six months ending 31 March, DiData CEO Brett Dawson said this morning that group revenue grew 15.4% year on year, from $1.12 billion to $1.29 billion, showing net profit of $6.26 million for the period. This is a 357% increase on last year`s six-month net profit of $1.37 million.
Revenue was fuelled by growth in the network integration and solutions lines of business, contributing 55% and 28% respectively.
Cash on the balance sheet was up from $330.62 million to $397.03 million.
Dawson says he is mildly positive over the dollar`s strength, which, on a like-for-like basis from last year`s six-month results, shows DiData has benefited, as growth would only sit at 12.7% on a like-for-like currency trade.
Africa, Asia, Australia, the US and UK all showed positive growth in group operating profit, with Africa leading DiData`s operations, generating group operating profit of $21.32 million, a 98.1% increase from $10.76 million.
"The involvement of our black economic empowerment partners since the second half of the financial year 2004 continues to provide opportunities within sub-Saharan Africa and the South African public sector," he says.
"We are looking to expand into Africa, by partnering and opening hubs in west and north-east Africa, from which we can expand."
Dawson says Europe disappointed, with operating profit declining by 24.8% from $4.45 million to $3.35 million, caused by underperformance in Germany, Sweden and Spain.
The German business did not deliver acceptable sales performances, a large contract resulted in losses in Sweden and inadequate volumes in Spain impacted profitability.
However, Dawson expects substantially improved performances from these countries in the second half of the financial year.
Dawson says DiData is ready to take advantage of new VOIP opportunities once the Convergence Bill has been finalised. With this in mind, part of a $17 million increase in capital expenditure and investment has gone towards refreshing Internet Solutions` infrastructure.
DiData shares were trading at 388c this morning, up 3.47% on yesterday`s close of 375c.
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