Datacentrix well set to go it alone
Instead they believe Datacentrix can keep pumping out solid results in its own right, with growth coming from building up its existing services rather than following a big bang acquisitive approach, said chairman Gary Morolo.
Its shares soared 5,39% gaining 25c to trade at R4,89 after its results for the year to February 28 were issued yesterday. Its revenue of R1,2bn was up 16% from R1bn, outstripped by a 41% rise in headline earnings a share, up from 28,7c to 40,4c.
Cash in hand stood at R174m, and it declared a final dividend of 13,2c, bringing the total dividend for the year to 20,2c.
Its largest division supplies technology infrastructure and related services, and contributed R1,1bn of the revenue and R99m of the profit before interest and tax.
That division had won some good outsourcing contracts to run the technology services for large companies, CEO Gerhard Uys said, and growing that business would remain an aggressive target.
Its far smaller solutions division contributed R68,4m in revenue and R16m in profits.
Uys said that previously under-performing division had been turned around to achieve the R16m profit after reaping just R2m a year ago.
Tight financial discipline on its debtors and stock levels had been maintained, and the profit margin had risen from 8,6% to 10,4%.
The improved margin was achieved by changing the product mix to provide more complex, higher margin services around the technology equipment it sold.
Services such as managing a customer’s computing equipment or its printing requirements on an outsourced basis were focus areas, Morolo said.
While the pre-tax profit margin had probably not peaked at 10,4%, Morolo said: “I don’t want to tie myself to predictions that say you will continue to see a climb.”
Uys said there were no major changes in the trends that Datacentrix was seeing, although one positive move was that the government — SA’s heaviest spender on technology — was beginning to loosen its purse strings.
The launch of Microsoft’s new Vista operating system should also trigger some increased spending as companies needed to upgrade their hardware to benefit from its latest features.
Consolidation as technologies players merged or were taken over would also continue, Uys said. But Morolo distanced Datacentrix from acquisitory actions. “From the perspective of running a good business we don’t think acquisitions are a good way generally,” he said.
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