Wrap Text
DTC - Datatec Limited - Audited Results for the Financial Year ended 29
February 2012 and Final Cash Distribution by way of Capital Reduction
DATATEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
AUDITED RESULTS FOR THE FINANCIAL YEAR ENDED 29 FEBRUARY 2012 AND FINAL CASH
DISTRIBUTION BY WAY OF CAPITAL REDUCTION
Datatec Limited ("Datatec" or the "Group", JSE and LSE: DTC), the
international Information and Communications Technology (ICT) group, is today
publishing its audited results for the financial year ended 29 February 2012.
Financial highlights
Revenue up 17% to $5,03 billion (2011: $4,3 billion)
EBITDA up 34% to $190,2 million (2011: $142,2 million)
Cash generated from operations $102,8 million (2011: $64,0 million utilised
by operations)
Underlying* earnings per share up 26% to 47,9 US cents (2011: 37,9 US cents)
Capital distributions of 16 US cents per share for the year (2011: 13 US
cents), including a final distribution of 9 US cents per share
* Excluding goodwill and intangibles impairment, amortisation of acquired
intangible assets, acquisition-related adjustments, profit or loss on sale of
assets and businesses, fair value movements on acquisition-related financial
instruments and unrealised foreign exchange movements.
Operational highlights
- On-going strong performance and operational leverage
- Continued margin expansion; overall EBITDA margin 3,8% (2011: 3,3%)
- Continuing to benefit from business diversification and international scale
- Improved business mix and growing annuity income stream
- Logicalis and Westcon establish operations in Indonesia
Current trading and prospects
- Security, unified communications and data centre infrastructure continue to
be the key solution drivers for growth. Risks remain in Europe, but a recovery
in the US and strength in the rest of the world to support global growth
- 2013 Financial Year forecast
> Revenues of between $5,5 billion and $5,8 billion (2012: $5,03 billion)
> Underlying* earnings per share of approximately 55 US (2012:47,9 US cents)
Jens Montanana, Chief Executive of Datatec, commented:
"I am delighted to report on another successful year for the Group. Our
unrelenting focus on operational performance has meant that once again, we
have been able to substantially increase revenues and expand margins,
resulting in the bottom line growing at twice the rate of revenues.
"Our global reach and diversity continues to serve us well, helping to
insulate the Group against the challenging trading conditions in North America
and Europe. South America and Asia Pacific remain our best performing markets,
with Brazil, once again, doing exceptionally well.
"We have a mature and robust business model, which has become increasingly
predictable and demonstrates defensive attributes in difficult economic
circumstances. This gives us the confidence to continue our capital
distribution to shareholders, having seven years of distributions and having
paid our first interim distribution in November.
"We remain cautious about the near term. While Europe looks likely to remain
challenging, we expect trading to improve in the US and a continued strong
performance from our businesses in the rest of the world."
Profile and Group structure
Datatec Group is a global provider of ICT products, solutions and services,
with approaching 6 000 people worldwide and with operations in over 40
countries.
The Group`s main lines of business comprise:
> Technology division: global distribution of advanced networking, security
and unified communications products ("Westcon")
> Integration division: ICT infrastructure solutions and services
("Logicalis")
> Consulting division: strategic and technical consulting ("Consulting
Services")
"Corporate" encompasses the costs of the Group`s head office entities.
OVERVIEW
Datatec delivered a very strong performance during the 2012 financial year,
with a substantial increase in revenues (up 17%), further margin expansion and
a 34% increase in EBITDA. This performance resulted in underlying earnings
per share of 47,9 US cents, up 26% on the prior year, exceeding the underlying
earnings per share guidance given at the start of the financial year by 1,9
percentage points.
Datatec`s global reach and geographic diversity continues to be a strong
asset, helping to mitigate the continuing challenging market conditions in the
US and Europe, with a very strong performance in the Group`s operations in the
rest of the world. Brazil again performed exceptionally well.
North America remains the Group`s largest market, and whilst trading in that
geography remained challenging, it continues to show signs of recovery.
Trading conditions in Europe were subdued, with no real growth, but in line
with expectations given the on-going economic turmoil in the Eurozone. The UK
in particular remained difficult, impacted by the weak economic environment.
South America, Asia Pacific and the Middle East remain the Group`s strongest
performing markets, with operations in South America enjoying an exceptional
performance, largely driven by the economic success of Brazil. The
geographies outside the US and Europe now generate 33% of Datatec`s revenues
and 40% of the Group`s gross profits, which serves to validate Datatec`s
decision to diversify its operations beyond its predominantly US and European
origins some years ago.
Datatec generated revenues of $5,03 billion, up 17% (2011: $4,30 billion),
organic growth was 14%. Overall gross margins expanded slightly to 14,0%
(2011: 13,9%).
The Group continues to benefit strongly from operational leverage, with EBITDA
increasing at twice the rate of revenues ($190,2 million, up 34% (2011: $142,2
million)). Of the $5,03 billion revenues, some 74% came from Distribution
(Westcon); 18% from ICT hardware and software Solutions (Logicalis) and 8% was
attributable to revenues derived from Services (Logicalis and Consulting
Services).
Trading and profitability continued to improve in all of the Group`s
divisions, driven by robust top line growth in both Westcon and Logicalis and
an improving business mix. Westcon benefited from its investment in higher
margin products such as network security. Logicalis enjoyed strong growth in
its annuity revenues business. The financial performance of Consulting
Services continued to improve, largely as a result of some of the changes
implemented in the prior year and better operational execution. This division
reported EBITDA of $4,8 million, up from $0.5 million in the prior year.
Underlying earnings per share rose 26% to 47,9 US cents per share (2011: 37,9
US cents).
STRATEGY
Datatec continues to pursue its long-term strategy to deliver sustainable
above average returns to shareholders by focusing on a combination of organic
growth in the faster-growing sectors of the ICT market, geographic expansion
and earnings-enhancing acquisitions.
Datatec enjoys a strong market position with no particular dependency on any
single market, territory or technology sector, as well as improving customer
mix.
During the year the Group has primarily focused on improving operational
performance, while pursuing a number of acquisition opportunities to enhance
margins, extend the Group`s geographical reach or to strengthen its position
in existing markets.
In April 2011, Logicalis acquired Inca Software, an IBM Cognos partner based
in the UK. This was followed in July 2011 with the acquisition of Netarx, a
Cisco Gold partner and provider of managed services, data centre and
collaborative IT solutions to customers in the Mid-West USA.
During the year, Westcon made a number of acquisitions as part of a strategy
of augmenting its security portfolio and extending the division`s reach into
new markets.
In August 2011, Westcon acquired entrada Kommunikations, a German-based, value-
added distributor of IT security products, to significantly grow its German
presence and enter the Swiss market.
On 1 December 2011, Westcon acquired Sentronics SD, a distributor of IT
physical security and video solutions.
On 12 March 2012 Westcon acquired PT Netpoleon, an Indonesian value-added
distributor of IT security, networking and convergence solutions.
The acquisition of Netpoleon, which completed after the year end, was notable
in that it gives Westcon its first significant presence in Indonesia, South
East Asia`s most populous country and one of the region`s fastest growing
economies. Logicalis has also entered the country by incorporating a new
networking integration company, in partnership with PT Metrodata Electronics,
Tbk.
The Group will continue to seek to improve its competitive position and
believes that the prevailing economic climate continues to provide attractive
opportunities to enhance margins, facilitate consolidation in proven markets
and extend the Group`s geographical reach.
FINANCIAL RESULTS
Group revenues increased by 17% to $5,03 billion (2011: $4,3 billion) with 34%
of Group revenue generated from North America (2011: 35%), 33% from Europe
(2011: 36%), 12% from Asia Pacific (2011: 11%), 13% from South America (2011:
11%) and 8% from AIME (2011: 7%).
Gross margins improved to 14,0% (2011: 13,9%). Gross profit increased by 18%
to $704,6 million (2011: $597,6 million), while operating costs increased at a
lower rate than gross profit by 13% to $514,4 million (2011: $455,4 million).
EBITDA increased 34% to $190,2 million (2011: $142,2 million), which includes
net unrealised foreign exchange gains of $0,5 million (2011: $0,4 million
losses). Depreciation was $23,9 million (2011: $21,0 million). Amortisation of
intangible fixed assets arising from acquisitions was $15,7 million (2011:
$16,2 million).
Operating profit increased by 43% to $150,6 million (2011: $105,0 million).
The net interest charge increased to $14,3 million (2011: $10,2 million), as a
result of Westcon`s utilisation of prompt pay arrangements and funding of
working capital growth.
Profit before tax increased 76,5% to $138,0 million (2011: $78,2 million),
after fair value movements on acquisition-related financial instruments.
The Group`s reported effective tax rate decreased to 35,4% from 41,2%. The
normalised effective tax rate was 35,1% (2011: 34,7%). The Group`s effective
tax rate is higher than the South African statutory tax rate of 28%, primarily
due to profits in jurisdictions with higher effective tax rates, most notably
North and South America. The higher effective tax rate in the current year is
due to a larger contribution to profits from these jurisdictions.
The effective tax rate for the financial year ending 28 February 2013 is
expected to be approximately 33%.
Underlying earnings per share increased by 26% to 47,9 US cents (2011: 37,9 US
cents). Headline earnings per share ("HEPS") increased by 80% to 43,1 US cents
(2011: 23,9 US cents). HEPS, excluding the effect of acquisition-related fair
value adjustments, is 42,9 US cents (2011: 31,9 US cents), reflecting an
increase of 34%.
Consistent with the prior year, Westcon is taking advantage of vendor supplier
prompt pay initiatives, which are earnings enhancing.
The Group`s operations generated $102,8 million cash during the period (2011:
cash utilised of $64,0 million).
The Group ended the period with net debt of $20,5 million (2011: net cash of
$48,1 million), after deducting long-term debt of $13,9 million and short-term
debt of $8,4 million included in the payables and provisions line on the
statement of financial position. The Group continues to enjoy comfortable
headroom in terms of its working capital lines.
The Group issued 0,9 million new shares during the year, with 0,6 million
shares issued as part of acquisition activities, while 0,3 million shares were
issued to satisfy exercised share options.
The fair value of companies acquired during the year was $54,7 million. As a
result goodwill and intangible assets increased by $48,5 million and $13,9
million respectively. The revenue and EBITDA included from these acquisitions
in 2012 was $93,2 million and $2,5 million respectively. Had the acquisition
dates been 1 March 2011, revenue attributable to these acquisitions would have
been approximately $145,4 million. It is not practical to establish the EBITDA
that would have been contributed by the acquisitions in 2012 if they had been
included for the entire year.
The Group paid $24,2 million to shareholders as a capital distribution in July
2011 relating to the 2011 financial year. The Group paid its first interim
capital distribution to shareholders for the 2012 financial year in November
2011 of $12,2 million.
The put option liability for Promon Logicalis Latin America Limited ("PLLAL")
of $45 million was reversed to reserves during the first half of the year
pursuant to the cancellation of the put option.
Losses of $13,8 million (2011: $32,4 million gains) arising on translation to
presentation currency are included in comprehensive income of $77,0 million
(2011: $76,4 million).
DIVISIONAL REVIEWS
Westcon
Westcon accounted for 74% of the Group`s revenues (2011: 74%) and 64,9% of its
EBITDA (2011: 66,3%).
Westcon is the world`s leading specialty distributor in networking, security,
mobility and convergence for leading technology vendors, including Cisco,
Avaya, Check Point, Bluecoat, Juniper and other complementary manufacturers.
Through its Comstor, Westcon Convergence and Westcon Security business units,
Westcon sells products and services to resellers, systems integrators and
service providers.
Westcon has particular expertise in the convergence of voice, data and video
applications and technologies, including Voice-over Internet Protocol
("VoIP"), security for networking and communications systems, data centre
technologies, videoconferencing and wireless connectivity.
The solid financial performance reported by Westcon during the previous
financial year continued during this year, with both revenues and
profitability showing an improvement over the prior year. Overall revenues
increased 17% to $3,7 billion (2011: $3,2 billion) with increases across all
regions. Westcon acquisitions contributed $42 million in revenue, resulting in
an increase in organic revenue of 16%.
From a geographic perspective, 35% of Westcon`s revenue was generated in
Europe (2011: 39%), 35% in North America (2011: 35%), 13% in Asia Pacific
(2011: 11%), 11% in Africa, India and Middle East ("AIME") (2011: 9%) and 6%
in South America (2011: 6%).
Gross margins increased to 10,7% (2011: 10,5%) with increased margins in
Europe and South America offset by lower margins in North America, AIME and
Asia Pacific. Overall gross margins improved as a result of a more favourable
product mix, which saw Cisco products make up 51% of Westcon`s revenue (2011:
52%), 15% for Avaya/Nortel (2011: 16%), 19% for security (2011: 17%) and 15%
for Affinity/other development vendors (2011: 15%). Gross profit increased 19%
to $399,6 million (2011: $334,4 million).
Operating expenses grew 16% to $266,3 million due to increased headcount
levels and higher outbound freight expenses. Operating expenses grew at a
lower rate than gross profit. As a result, Westcon`s EBITDA increased 27% to
$133,3 million (2011: $105,3 million) while EBITDA margins increased to 3,6%
(2011: 3,3%), with increased margins in Europe and South America offset by
lower margins in Asia Pacific and AIME and consistent results in North
America.
Operating profit increased 32% to $120,4 million (2011: $91,3 million).
Westcon continued its strong working capital management during the year.
In August 2011, Westcon acquired entrada Kommunikations, the second largest
distributor of security products in Germany, adding considerable strength to
its German IT security practice.
In December 2011, Westcon acquired Sentronics SD, a value-added distributor of
electronic video and security equipment in South Africa.
On 12 March 2012 Westcon completed the acquisition of PT Netpoleon, an
Indonesian value-added distributor of IT security, networking and convergence
solutions.
Westcon is in the process of transitioning its existing global ERP system to a
new SAP-based platform. The upgrade is part of a program to improve and
optimise Westcon`s systems and infrastructure capabilities in support of its
growing business and increasing transaction volumes. Of this year`s increase
in capitalised development expenditure, $20 million is attributable to this
ERP system transition.
Management expects double digit revenue growth for the 2013 financial year,
with margin expansion, improving product mix and broadening geographic reach.
Logicalis
Logicalis accounted for 25% of the Group`s revenues (2011: 24%) and 32,8% of
its EBITDA (2011: 33,4%).
Logicalis is an international IT solutions and managed services provider with
a breadth of knowledge and expertise in IT infrastructure and networking
solutions, communications and collaboration, data centre and cloud services,
and managed services.
Overall revenues and profits in the second half of the financial year were
higher than in the first half. The South America region in particular had an
exceptionally strong performance, as telecommunication service providers
continue to invest in their core infrastructures. The UK and US markets were
more challenging.
Revenue increased by 18% to $1,23 billion (2011: $1,05 billion), including
$48,6 million of revenue from the acquisitions made during the year. Organic
revenue increased by 11%, benefiting from the high growth rate in South
America.
Revenues from product sales were up 13%, with robust increases in the Cisco
and HP vendor categories. Revenues from total services were up 36% and strong
growth in annuity service revenues of 41% reflected the long-term strategic
focus on this segment of the business with investments made in data centre and
cloud-based services assets.
The gross margin was slightly lower at 22,5% (2011: 23,0%). Both product and
services margins were down slightly. The gross profit was up 15% to $277,4
million (2011: $240,7 million). Improved operational leverage resulted in
operating expenses increasing by only 12%. EBITDA increased 27% to $67,4
million (2011: $53,0 million), resulting in an EBITDA margin of 5,5% (2011:
5,1%).
After charges for depreciation and amortisation of intangible assets,
operating profit was up 36% to $42,6 million (2011: $31,3 million).
During the first half of the financial year, Logicalis completed two
acquisitions to consolidate its position in the UK and US respectively. In
April 2011, Logicalis acquired Inca Software, an IBM Cognos partner and in
July 2011, it acquired Netarx, a Cisco Gold partner and provider of managed
services, data centre and collaborative IT solutions to customers in the US
Mid-West.
During the year the Group incorporated a new company in Indonesia focused on
network integration. The Indonesian company, which commenced trading in
January 2012, has a 49% partner, PT Metrodata Electronics, Tbk.
On 31 August 2011, Logicalis sold 10% of the share capital in PLLAL to its
partner in South America, Promon SA. Logicalis first partnered with Promon in
May 2008 and formed PLLAL to develop its existing South American business.
Since then the business has gone from strength to strength. Promon has now
committed to the long-term future of PLLAL by acquiring a further 10% interest
in the business for $15 million in cash, increasing its share of the business
to 40%. As a result Datatec`s equity ownership of PLLAL through Logicalis
reduced to 60%, with effect from 31 August 2011.
The outlook in South America and Asia Pacific regions remains positive.
Although US economic data is indicating a slow recovery, the UK market remains
challenging. Logicalis expects to continue investing in cloud and data centre
services and continues to evaluate acquisition opportunities in existing
markets. Logicalis expects to deliver continuing growth in the 2013 financial
year, with a seasonally stronger second half, compared to the first half.
Consulting Services
The Consulting Services division, comprising the majority-owned businesses
Analysys Mason, Intact, Via Group, and an equity stake in Cornwall Energy,
accounted for 2% of Group revenues (2011: 2%) and 2,3% of EBITDA (2011: 0,3%).
Analysys Mason delivers management consulting, advisory, modelling and market
intelligence services to the telecoms, IT and digital media industries. The
company`s clients include telecoms operators, financial institutions, media
organisations, regulators and a range of other public sector bodies.
Intact is a services and support consultancy delivering high-end professional
services in networking, unified communications, security, wireless and data
centre technologies. Intact`s services are offered exclusively through its
partner network, which include value-added resellers, systems integrators,
network integrators and service providers.
On 2 October 2011, Datatec acquired a further stake in Via Group ("Via") to
achieve effective control of this Texas-based business. Via is a recognised
leader in providing professional services supporting Avaya and Microsoft-based
unified communications solutions.
Cornwall Energy provides participants in and customers of the energy markets
with research and consulting services focusing on electricity generation and
distribution, including renewable energy, and smart grids (intelligent
networked distribution).
Total divisional revenues increased by 10% to $79,4 million (2011: $72,5
million) due to a combination of organic growth in the US and the first-time
inclusion of Via.
Better utilisation of consultants and internal restructuring activities helped
to increase EBITDA to $4,8 million (2011: $0,5 million).
Stable revenues are anticipated for the 2013 financial year, with continued
improved operating performance. Advanced mobility and broadband services are
continuing to create opportunities for this division.
Corporate
Corporate encompasses the net operating costs of the Datatec head office
entities of $17,1 million (2011: $15,7 million) and unrealised and realised
foreign exchange gains of $0,2 million and $1,6 million respectively (2011:
losses of $0,2 million and $0,8 million respectively). The increase in head
office costs is mainly attributable to transaction-related expenses, marketing
campaigns in support of Datatec`s 25th year anniversary and an increased focus
on raising our international visibility.
REPORTING
The condensed financial information has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards ("IFRS") of the International
Accounting Standards Board, the AC 500 standards as issued by the Accounting
Practices Board, and the information as required by IAS 34: Interim Financial
Reporting and the requirements of the Companies Act of South Africa. The
report has been prepared using accounting policies that comply with IFRS which
are consistent with those applied in the financial statements for the year
ended 28 February 2011. The preparation of the Group`s consolidated year end
results for financial year ended 29 February 2012 was supervised by the Chief
Financial Officer, Ivan Dittrich. These results have been audited in
compliance with any applicable requirements of the Companies Act of South
Africa.
The auditors, Deloitte & Touche, have issued an unmodified opinion on the
Group`s financial statements for the year ended 29 February 2012. The audit
was conducted in accordance with International Standards on Auditing. These
condensed financial statements have been derived from the audited Group
financial statements and are consistent in all material respects, with the
Group financial statements. A copy of their audit report is available for
inspection at the Company`s registered office. Any reference to future
financial performance included in this announcement, has not been reviewed or
reported on by the Company`s auditors.
SUBSEQUENT EVENTS
On 12 March 2012, Westcon completed the acquisition of PT Netpoleon, an
Indonesian value-added distributor of IT security, networking and convergence
solutions and provider of managed and training services. Netpoleon achieved
unaudited revenues for the year ended 31 December 2011 of $11 million.
On 1 May 2012, Logicalis agreed to acquire Corpnet, an Australian IT solutions
provider based in Brisbane. Corpnet is one of the leading providers of IT
solutions (including data centre and cloud managed service solutions) to the
mid-sized and enterprise markets in Queensland and has annualised revenues of
approximately $20 million. The acquisition brings complementary skills and
resources which will build upon Logicalis` existing data centre and managed
services expertise in Australia.
CURRENT TRADING AND PROSPECTS
Despite difficult economic conditions in certain markets in which the Group
operates, companies` balance sheets generally remain strong and technology
spending continues to be healthy. Security, unified communications and data
centre infrastructure continue to be the key drivers for growth in our
industry. Although risks remain in Europe, the Board expects a recovery in the
US and strength in the rest of the world to support global growth.
Based on current trading conditions and prevailing exchange rates, the Board
expects revenues for the 2013 financial year of between $5,5 billion and $5,8
billion. The Board expects underlying* earnings per share to be approximately
55 US cents and both earnings per share** and headline earnings per share** to
be approximately 50 US cents. Profit after tax** is expected to be
approximately $104 million. The financial information on which this forecast
is based has not been reviewed and reported on by Datatec`s external auditors.
DIRECTORATE
Rob Evans was appointed as a Director of the Board of Datatec with effect from
1 May 2012 and Ivan Dittrich will leave the Board on 1 June 2012, at which
point Rob Evans will succeed him as Chief Financial Officer.
DIVIDEND/CAPITAL DISTRIBUTION POLICY
During the financial year ended 29 February 2012, the Group`s dividend/capital
distribution policy was amended from making a single annual payment to making
both an interim and final distribution. The dividend cover policy of at least
three times relative to underlying* earnings per share now applies to both
interim and final distributions.
CASH DISTRIBUTION BY WAY OF CAPITAL REDUCTION
The Group paid an interim capital distribution to shareholders of 56 RSA cents
(approximately 7 US cents) per share on 28 November 2011. The Group has
declared and will distribute to shareholders a final capital reduction in lieu
of a dividend out of share premium (a reduction of Contributed Tax Capital) of
75 RSA cents per share (approximately 9 US cents per share), making a total
capital distribution to shareholders for the financial year ended 29 February
2012 of 131 RSA cents (approximately 16 US cents) per share.
The salient dates will be as follows:
Last day to trade Friday, 6 July 2012
Shares to commence trading "ex" the distribution Monday, 9 July 2012
Record date Friday, 13 July 2012
Payment date Monday, 16 July 2012
The final capital distribution will be paid to shareholders on the Jersey
branch register in GBP translated at the closing exchange rate on Wednesday 11
July 2012. Share certificates may not be dematerialised or rematerialised
between Monday, 9 July 2012 and Friday, 13 July 2012, both days inclusive.
On behalf of the Board:
SJ Davidson JP Montanana IP Dittrich
Chairman Chief Executive Officer Chief Financial Officer
16 May 2012
*Excluding goodwill and intangibles impairment, amortisation of acquired
intangible assets, acquisition-related adjustments, profit or loss on sale of
assets and businesses, fair value movements on acquisition-related financial
instruments and unrealised foreign exchange movements.
**Forecasts for profit after tax, earnings per share and headline earnings per
share do not take into account any fair value gains or losses on acquisition-
related financial instruments (including put option liabilities), which are
required under IFRS.
Condensed Group statement of comprehensive Audited Audited
income for the year ended 29 February 2012 year ended year ended
February February
2012 2011
USD`000 USD`000
Revenue 5 033 394 4 302 972
Existing operations 4 940 164 4 293 955
Acquisitions 93 230 9 017
Cost of sales (4 328 814) (3 705 417)
Gross profit 704 580 597 555
Operating costs (514 974) (454 949)
Unrealised foreign exchange gains/(losses) 585 (425)
Operating profit before finance costs, 190 191 142 181
depreciation and amortisation ("EBITDA")
Depreciation (23 861) (21 045)
Amortisation of acquired intangible assets (15 686) (16 160)
Operating profit 150 644 104 976
Interest income 7 623 6 030
Financing costs (21 905) (16 210)
Acquisition-related fair value adjustments 402 (14 701)
Fair value movements on put option 16 (14 701)
liabilities
Fair value adjustments on deferred purchase 386 -
consideration
Share of equity-accounted investments 425 118
earnings
Other income 782 -
Loss on disposal of investments - (2 035)
Profit before taxation 137 971 78 178
Taxation (48 902) (32 238)
Profit for the year 89 069 45 940
Other comprehensive income
Exchange differences arising on translation (13 778) 32 399
to presentation currency
Translation of equity loans net of tax effect 4 615 (2 732)
Other items (2 856) 809
Total comprehensive income for the year 77 050 76 416
Profit attributable to:
Owners of the parent 80 846 41 893
Non-controlling interest 8 223 4 047
89 069 45 940
Total comprehensive income attributable to:
Owners of the parent 72 282 70 346
Non-controlling interest 4 768 6 070
77 050 76 416
Number of shares issued (millions)
Issued 188 186
Weighted average 186 184
Diluted weighted average 189 187
Earnings per share ("EPS") (US cents)
Basic EPS 43,5 22,8
Diluted basic EPS 42,8 22,4
SALIENT FINANCIAL FEATURES
Headline earnings 80 188 44 020
Headline earnings per share (US cents)
Headline 43,1 23,9
Diluted headline 42,5 23,5
Underlying earnings 89 166 69 705
Underlying earnings per share (US cents)
Underlying 47,9 37,9
Diluted underlying 47,2 37,3
Net asset value per share (US cents) 438,6 392,1
KEY RATIOS
Gross margin (%) 14,0 13,9
EBITDA (%) 3,8 3,3
Effective tax rate (%) 35,4 41,2
Normalised effective tax rate (%) 35,1 34,7
Exchange rates
Average Rand/USD exchange rate 7,3 7,2
Closing Rand/USD exchange rate 7,5 7,0
Condensed Group statement of financial Audited Audited
position as at 29 February 2012 year ended year ended
February February
2012 2011
USD`000 USD`000
ASSETS
Non-current assets 574 970 515 590
Property, plant and equipment 55 145 52 915
Capitalised development expenditure 34 117 15 570
Goodwill 377 869 338 320
Acquired intangible assets 41 772 43 796
Investments 5 709 7 914
Deferred taxation assets 37 229 35 966
Other receivables and prepayments 23 129 21 109
Current assets 1 823 437 1 481 342
Inventories 412 115 299 460
Trade and other receivables 1 163 534 944 230
Cash and cash equivalents 247 788 237 652
Total assets 2 398 407 1 996 932
EQUITY AND LIABILITIES
Ordinary shareholders` funds 823 369 727 702
Non-controlling interest 56 059 42 677
Total equity 879 428 770 379
Non-current liabilities 66 083 91 102
Long-term liabilities 13 915 21 171
Amounts owing to vendors 2 057 26 353
Liability for share-based payment 10 423 9 467
Deferred taxation liabilities 39 688 34 111
Current liabilities 1 452 896 1 135 451
Payables and provisions 1 187 967 935 227
Amounts owing to vendors 14 327 33 132
Taxation 4 627 12 659
Bank overdrafts 245 975 154 433
Total equity and liabilities 2 398 407 1 996 932
Capital expenditure incurred in current year 43 053 30 610
(including capitalised development
expenditure)
Capital commitments at end of year 10 142 23 160
Lease commitments at end of year 98 213 93 412
Payable within one year 27 516 22 858
Payable after one year 70 697 70 554
Condensed Group statement of cash flows for Audited Audited
the year ended 29 February 2012 year ended year ended
February February
2012 2011
USD`000 USD`000
EBITDA 190 191 142 181
(Profit)/loss on disposal of property, plant (733) 67
and equipment
Non-cash items (832) (1 172)
Cash generated before working capital changes 188 626 141 076
Working capital changes (85 783) (205 106)
Increase in inventories (109 479) (11 051)
Increase in receivables (188 004) (80 441)
Increase/(decrease) in payables 211 700 (113 614)
Cash generated from/(utilised by) operations 102 843 (64 030)
Net finance costs paid (14 282) (10 180)
Taxation paid (55 619) (26 687)
Net cash inflow/(outflow) from operating 32 942 (100 897)
activities
Cash outflows for acquisitions (27 521) (14 705)
Net cash outflow from other investing (42 943) (31 295)
activities
Net cash inflow from disposal of operations 14 988 -
and investments
Net cash (outflow)/inflow from other (27 684) 6 677
financing activities
Capital distribution to shareholders (36 383) (21 713)
Net decrease in cash and cash equivalents (86 601) (161 933)
Cash and cash equivalents at the beginning of 83 219 239 834
year
Translation differences on opening cash 5 195 5 318
position
Cash and cash equivalents at the end of year 1 813 83 219
(*)
(*) Comprises cash resources, net of bank overdrafts and trade
finance advances.
Condensed Group statement of changes in total Audited Audited
equity for the year ended 29 February 2012 year ended year ended
February February
2012 2011
USD`000 USD`000
Balance at beginning of the year 770 379 718 779
Total comprehensive income 77 050 76 416
New share issues 3 545 13 694
Capital distribution to shareholders (36 383) (21 713)
Equity-settled deferred purchase 6 667 -
consideration
Share-based payments (165) 277
Derecognition of put option liability 45 000 -
Acquisitions (815) (2 781)
Disposals 5 536 -
Non-controlling interest 8 614 (14 293)
Balance at end of the year 879 428 770 379
Determination of headline and underlying Audited Audited
earnings for the year ended 29 February 2012 year ended year ended
February February
2012 2011
USD`000 USD`000
Profit attributable to equity holders of the 80 846 41 893
parent
Headline earnings adjustments
(Profit)/loss on disposal of property, plant (733) 2 103
and equipment and investments
Tax effect 75 24
Headline earnings 80 188 44 020
DETERMINATION OF UNDERLYING EARNINGS
Underlying earnings adjustments 14 459 31 286
Unrealised foreign exchange (gains)/losses (585) 425
Fair value movements on acquisition-related (402) 14 701
financial instruments
Acquisition-related adjustment (240) -
Amortisation of intangible assets 15 686 16 160
Tax effect (5 472) (5 559)
Non-controlling interest (9) (42)
Underlying earnings 89 166 69 705
Segmental analysis for the year ended 29 Audited Audited
February 2012 year ended year ended
February February
2012 2011
USD`000 USD`000
Revenue
Westcon 3 719 636 3 184 042
Logicalis 1 234 334 1 046 422
Consulting Services 79 424 72 508
Revenue from continuing operations 5 033 394 4 302 972
EBITDA
Westcon 133 257 105 328
Logicalis 67 395 53 032
Consulting Services 4 778 541
Corporate (15 239) (16 720)
EBITDA from continuing operations 190 191 142 181
Operating profit
Westcon 120 360 91 277
Logicalis 42 609 31 340
Consulting Services 3 331 (764)
Corporate (15 656) (16 877)
Operating profit from continuing operations 150 644 104 976
Total assets
Westcon 1 529 565 1 284 221
Logicalis 801 493 641 912
Consulting Services 53 527 48 554
Corporate 13 822 22 245
Total assets 2 398 407 1 996 932
Directors
SJ Davidson* (Chairman), JP Montanana (CEO), IP Dittrich (CFO),
RP Evans, O Ighodaro*#, JF McCartney*+, LW Nkuhlu*, CS Seabrooke*,
NJ Temple*
British *Non-executive +American #Nigerian
Enquiries
Datatec Limited (www.datatec.co.za)
Jens Montanana, Chief Executive Officer +44 (0) 1753 797118
Ivan Dittrich, Chief Financial Officer +27 (0) 11 233 1221
Wilna de Villiers, Group Marketing Manager +27 (0) 11 233 1013
Jefferies Hoare Govett - Nominated Adviser and Broker
Nick Adams/Tom Rider +44 (0) 20 7029 8000
finnCap - Broker
Tom Jenkins/Henrik Persson +44 (0) 20 7220 0500
College Hill
Adrian Duffield/Rozi Morris (UK) +44 (0) 20 7457 2020
Frederic Cornet/Morne Reinders (SA) +27 (0) 11 447 3030
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 16/05/2012 08:00:05 Supplied by www.sharenet.co.za
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