Datacentrix is considering how best to return some of its R167 million cash pile to shareholders.
Yesterday the group presented its results for the year to February, showing growth in all key indicators.
Revenue was up by 17.51% from R763.78 million to R897.49 million, while earnings before interest, tax, depreciation and amortisation rose by 40.3% from R57.16 million to R80.22 million.
CEO Gerhard Uys says the improved margin, which rose from 7.5% to 8.9%, is mainly because of the sales mix, but also a result of cost containment.
Pre-tax income rose from R50.77 million to R68.82 million and attributable earnings were up by 40.7% from R31.75 million to R44.66 million. Earnings per share of 22.8c compared with prior-year earnings of 16.3c a share, while headline earnings were up from 20.7c a share to 27.1c.
The group has R167.15 million on the balance sheet in the form of bank balances and cash. Executive chairman Gary Morolo says the group is not on an acquisition drive and so is examining how best to return some of the cash to shareholders.
This, he says, will take place once the group has determined what level of capital it needs to retain. In the meantime, the board has proposed a dividend of 9c a share.
Morolo says while the past few years have been tough for the IT sector, there are signs of improved spending patterns as the delayed IT refreshment cycle begins. "We remain very strong and very vibrant in a market that has seen some casualties," he adds.
Uys says the company is likely to experience growth in several areas. He says Datacentrix is a player in three significant three-year government contracts. Other growth areas are the Johannesburg market, selective outsourcing, managed print services (where it expects to achieve annuity revenue through three- to five-year contracts) and networking.
Uys says, however, that Datacentrix is not interested in being outside SA, unless current customers want work done for them. "We are not going to set up branches outside SA." Morolo says many companies that listed on the JSE with Datacentrix "expanded abroad and came to grief".
He adds that the group is too small to expand abroad and there is still a lot of opportunity for it in SA.
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