Tight cost controls have helped Dimension Data more than double operating profit for the year to September.
This morning the group reported an operating profit of $61.69 million before goodwill amortisation, impairment and exceptional items, compared with a $25.67 million profit the previous year.
This was on the back of a13.8% increase in group turnover, from $2.37 billion to $2.73 billion.
CEO Brett Dawson says overheads rose by 6.4% in the period, and as a proportion of revenue improved to 18.1% from 19.6% previously.
The growth filtered down through all the key indicators, with the group achieving total operating profit of $69.76 million versus a previous $14.61 million loss. Pre-tax profit amounted to $51.8 million, compared with a loss of $4.39 million previously.
A $17.76 million profit for the year is a turnaround from the previous year`s $37.8 million. The group achieved earnings of 1.4 US cents a share before goodwill amortisation and exceptional items, compared with 0.9 US cents previously.
Basic earnings of 1.3 US cents a share compares with a previous loss of 2.8 US cents a share.
The group reported a net cash inflow of $110.89 million (2004: $77.47 million) from operating activities. Cash at bank and in hand amounted to $404.07 million ($414.09 million) at the end of the period.
CEO Brett Dawson says this was a year in which the group set a clear strategy to drive profits across all operations.
Dimension Data operates in six lines of business - network integration, which contributes 54% of revenue, and five other lines under the solutions umbrella: converged communications, customer interactive solutions, operating environments and messaging, data centres and storage, and security.
The network integration business grew revenue 7.7%. Europe still lagged, with an 11.2% revenue decline in what Dawson refers to as tough market conditions, leaving the rest of the networking regions with an average 13.3% growth.
But the real growth was experienced in solutions, which rose 41.9%.
"We are on a journey, and we are pleased with the progress we have made in getting operating profits in shape," Dawson says, adding that the group expects continued growth in all its lines of business.
The Dimension Data share was trading at 444c on the JSE late this morning, up 5c or 1.44% from yesterday`s close.
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