Friendlier markets lift Didata

2010-05-12 10:17

Johannesburg - Technology group Dimension Data [JSE:DDT] said on Wednesday the economic recovery in global markets has enabled it to deliver strong interim earnings growth.

Dimension Data, which is listed in London and Johannesburg, reported sales of $2.2bn for the period to end-March - up 11.1% in reported currency over the previous reporting period. Operating profit increased by 21% to $107.5m, and the group's operating margin expanded to 5%, compared to 4.6% before.

Earnings per share grew 20% to 4.2c and the group ended the period with cash reserves of $493m.

Said CEO Brett Dawson: "We are optimistic about our market positioning and relevance, and believe that the market has turned in terms of clients' willingness to spend on IT and IT services.

"We anticipate that the second half of 2010 will see further recovery in client spend, and are confident that our targets of single-digit constant currency growth in revenue for the full year are achievable."

Didata attributed its better operating margins to an increased contribution of services rendered and "good containment of overheads".

However, Dawson said the results would have to be analysed against the backdrop of major currency fluctuations across the regions where the group trades.

Revenues in constant currency declined by 3.7%, with first-quarter 2010 revenues down, while second-quarter 2010 revenues showed a return to growth. The decline was primarily driven by a sharp deterioration in revenues at subsidiaries Plessey and Express Data.

Plessey reported a 51.4% constant currency revenue decline, while Express Data's revenue fell by 13.8%.

Dawson said the highlight of the period was the performance of Didata's Systems Integration (SI) business, which grew operating profit by 15.8% in constant currency to $80.6m and reported an improved operating margin of 4.5%, up 3.8% on the comparative period.

Subsidiary Internet Solutions delivered constant currency revenue growth of 10%. The performance was driven by an improved operating margin and an 11.7% increase in profitability on the back of new contracts in the public sector and a strong uptake in its other offerings, including cloud computing.

"Growth and operating leverage remain key objectives. Looking towards the next three to five years, we have set an objective of growing constant currency revenues by at least 10% on a compound basis, with services growing ahead of product revenues, and are targeting a 7% operating margin by 2015," said Dawson.

"This margin improvement will be driven by a greater contribution from services and a focus on efficiencies of scale. We are investing to reach these growth targets and to ensure our transition to a 'services-led' company continues to track to plan," he said.


  • ITIL the future - 2010-05-12 12:01

    Spot on Didata! I just attended the ITIL service management course at FOSTER MELLIAR and I can confirm that "services" are the new revenue generator!!

  • future? - 2010-05-12 14:08

    @ ITIL: dude, where have you been for the last 6 years? services have been the revenue generator since IBM sold the commodity business to Lenovo!

  • Peter Khun - 2011-02-25 13:53

    Yes, it is said that ITIL is the easiest course to do if you have no IT skills. All course fees are payable in advance and some (Academy) will also guarantee you a pass. I think this ITIL - Information Technology Infrastructure Library (ITIL Version 3 Foundation Course and Certification Examinations) is a fun and what is great is that the answers are given by the instructor, I am sure not all of them do this ;-) What makes me upset is that some candidates do not have a clue of what they are doing but at the end of the day it is all smiles as everyone gets a certificate. Many websites (e.g., has the latest screen dumps, no surprise on what the answers are… At ±R22 000.00 (Includes training manual, exam fees and meals) I personally think that ITIL is a great deal but the down side is that this certificate will soon not be worth much once the man on the street finds out everyone will have a ITIL Version 3 Certification.

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