Upbeat Didata posts strong results

2010-11-17 14:25

 Johannesburg - Telecommunications firm Dimension Data Holdings [JSE:DDT] on Wednesday reported a strong set of annual results and gains in market share.

The group's systems integration, managed services and the US business all delivered stand-out performances, the group said.

Didata reported a rise in earnings per share to 9.0 US cents for the year ended September 2010, from 7.6c a year ago.

Revenue for the period was $4.74bn, up 19.4% in reported currency over the prior period. The results were supported by the appreciation in the exchange rates for some of the group's main trading currencies - notably the rand and the Australian dollar - against the US dollar.

Group revenues grew by 9.9%. Operating margin rose slightly to 5.0% from 4.9%, and operating profit was up 8.2% at $237.8m.

Subsequent to the year-end, Didate was wholly acquired by Tokyo-based global telecommunications service provider Nippon Telegraph and Telephone Corporation in a deal valued at R24.4bn.

Didata has made applications to cancel the listing of its shares in London and Johannesburg, and the delisting is expected to take effect on December 14.

The group's systems integration business delivered a strong performance across all regions, growing revenue by 14.9% to $3.89bn and operating profit by 31.8% to $183m at an operating margin of 4.7%.
Group product revenues bounced back at $2.73bn, up 11.3% in constant currency, while services were $2.02bn, up by 8.2%.

Good services growth in systems integration was supported by managed services growth of 14.1% and professional services growth of 14.7%.

Internet solutions showed strong growth, but this was offset by a sharp decline in Plessey, the group said.

CEO Brett Dawson said the group's vision of a focus on key, high-growth technology sectors including the network, unified communications and collaboration and virtualisation, continues to stand it in good stead.
"Our growth rates are greater than the market, implying market share gains in nearly all of our areas of focus,” Dawson said.

Mexican revenue full of beans
He noted the Americas delivered a strong increase in operating profit, up to $25.1m from $5.5m in 2009, driven by an excellent recovery in the US. 

Revenue was up 34.6%, the result of a recovery in product volumes but also excellent managed services growth of 27.4%, where the region recorded some good multi-year contract wins.
Mexico delivered good revenue and operating profit growth, while Brazil showed improved performance in the second half.

Asian revenues were up 17.6% and operating profit increased slightly to $53.3m, constrained by continued progress on a planned investment programme. An operating margin of 7.2% was achieved.
Revenues in Australia were up by 8.2%, where services growth of 22.9% was particularly strong.  Operating profit and operating margin grew to $34.8m and 5.3% respectively.

Europe's revenues grew by 8.0%, a strong performance given continued constrained macroeconomic conditions in the region. Operating profit improved to $34.2m from $29.5m  at an operating margin of 3.3% from 3.1%.
Didata's Middle East and Africa business grew revenues by 9.7%. Operating profit and operating margin were up to $53.7m and 8.2% respectively, from 2009's $33.6m and 6.4%. 

Its emerging Africa operations reported a solid increase in operating profit, with good traction in the region for the group's services offerings.
Five acquisitions, including the acquisition of interests in a Moroccan systems integrator, a Chilean systems integrator, an Australian infrastructure hosting business, an African Wi-Fi provider and mVision, a UK video conference integrator, are expected to increase the group's global footprint and enhance its specialist IT solutions and services capabilities.

Internet solutions grew revenue by 10.5% with good growth in its communications, cloud and carrier business units. 

The Plessey business experienced tough trading conditions during the year and revenues were down by 43.2%. However, the second half saw an encouraging improvement in conditions. 
“In the last seven years we have doubled the business and expanded from operating in 29 countries to 49 countries," Dawson said.