Strong results from Datacentrix

JSE-listed Datacentrix has reported a strong set of results for the year to 28 February 2002, for the first time reporting turnover of more than R500 million.

Although the group grew turnover 32.4% to R521.58 million, executive chairman Gary Morolo says Datacentrix does not focus on growing revenue, but on operating income, which increased 62.1% from the previous year.

"Anyone can grow revenue at the expense of the business," Morolo comments.

He adds that the infrastructure division was the largest contributor to the results. "There has been an incremental growth in the sheer size of deals being brought in today, with existing customers placing larger orders on a multi-year basis."

The group`s black empowerment shareholding has increased to 49%, with the balance of the shares being held by management and staff (27%), Treacle Venture Partners (14%) and financial institutions and the public (10%).

Morolo says the 10% held by institutions and the public is too low, both in terms of Datacentrix`s opinion and JSE requirements, and the matter is being examined.

The group has ended its involvement in e-community initiatives by buying the 30% of Commerce Centre of Southern Africa held by ParaNet and exiting all community-based projects, including the fast-moving consumer goods National Product Initiative.

Group MD Gerhard Uys says Datacentrix invested R16 million in the venture. When it closed, it was left with R5 million cash, a tax asset, and fully depreciated assets. Added together, the group lost about R5 million through Commerce Centre.

Group marketing and sales director Klaas Lammers says the size of the IT market in SA has been estimated at about R30 billion. As Datacentrix has only a small market share, there is no need for it to go outside of SA within the next five years.

However, it has been looking at potential acquisitions, and is hoping that the right opportunities present themselves this year.

Uys says some of the group`s cash would be used for this purpose, in combination with shares.

Datacentrix`s growth strategy going forward includes controlled expansion, expanding into the existing customer base, increasing the services offering, capitalising on industry volatility, increasing the Johannesburg focus, new business focus areas, and the right acquisitions, says Lammers.

He adds that the group has not been affected by the global economic slowdown as its focus has always been on critical solutions and services rather than those that are simply "nice to have".

The Datacentrix share was trading at 102c on the JSE late on Tuesday afternoon, up 14c or 16% from the previous close.