Dimension Data wants to hit $7 billion in revenue in the next three to five years, and its acquisition by Japanese firm Nippon Telegraph and Telephone (NTT) will bolster its growth plans.
Dimension Data announced in July that Japan-based NTT had offered £2.1 billion, or R24 billion, to buy it out. Dimension Data was once the darling of the stock exchange, before the dot-com bubble burst at the beginning of the decade.
This morning, Dimension Data reported its year-end results to September, its first set of figures published after the buyout, although the transaction occurred after year-end. Dimension Data bolstered revenue 19.4%, to $4.74 billion. Its operating profit margin was stable at 5% on the back of operating profit growing 8.2%, to $237.8 million.
CEO Brett Dawson says the opportunity NTT presents is still about three to five years down the line. Being bought out by NTT accelerated the company's growth plans by a few years. “Our growth rates are greater than the market, implying market share gains in nearly all of our areas of focus.”
Targeting the cloud
Dawson explains the company is moving towards offering cloud-based services, but - in the meantime - growth will come from its strategic journey towards offering unified communications for the next two to three years.
However, these targets were set before the NTT offer and Dawson says the company could “power beyond” its aims towards the end of its target period as NTT aids its growth. In the past five years, DiData has doubled its business, and Dawson hopes to achieve a similar growth rate in the next half-decade.
Dawson points out shareholders made their money back seven times over in the last seven years, which was when DiData hit its lowest share price. At one point, in late 2000, the company's shares hit R70. However, these gains were wiped out during the dot-com crash and DiData stock fell to below R2 a share in 2003.
The company was, until its shares were suspended last month pending the delisting, the largest IT company on the JSE. Its shares last traded at R13.05.
Its market capitalisation on 26 October - when trade was suspended - was R22.4 billion, streaks ahead of peers such as Datatec at R6.2 billion, Gijima at R679 million and Business Connexion, which has a market capitalisation of R1.9 billion.
Dimension Data will be delisted from both the London and Johannesburg exchanges in the middle of December. However, it is anticipated the company will continue to provide the market with details of its financial performance.
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