Wrap Text
Unaudited condensed consolidated interim results for the six months ended 31 August 2013 and dividend declaration
DATACENTRIX HOLDINGS LIMITED
INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA
(REGISTRATION NUMBER: 1998/006413/06)
SHARE CODE: DCT
ISIN: ZAE 000016051
(“Datacentrix” or “the Group” or “the Company”)
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED
31 AUGUST 2013 AND DIVIDEND DECLARATION
Key Financial Indicators
* Revenue exceeds R1 billion
* EBITDA increased by 22% to R70.1 million
* Operating margin increased by 11% to 5.5%
* Earnings per share and headline earnings per share increased by 9.4% to
20.9 cents and 21.0 cents, respectively
* Cash generated from operations of R48.1 million, resulted in cash on
hand of R245.6 million
* Interim gross cash dividend declared of 12.32 cents per share
Condensed Consolidated Statements of Comprehensive Income for the six
months ended 31 August 2013
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 August 31 August 28 February
2013 2012 2013
R?000 R?000 R?000
Revenue 1 008 924 976 726 1 919 487
Operating profit 55 991 48 559 106 163
Net interest received 3 030 6 094 6 356
Profit before taxation 59 021 54 653 112 519
Income taxation expense (18 083) (17 194) (35 199)
- normal and deferred taxation (17 912) (16 917) (34 762)
- dividends tax/secondary taxation
(171) (277) (437)
on companies
Total comprehensive income
attributable to ordinary
shareholders 40 938 37 459 77 320
Basic earnings per ordinary share
20.9 19.1 39.5
(cents)
Diluted basic earnings per
20.8 18.8 39.0
ordinary share (cents)
Dividend per share (cents) 12.32 11.25 19.7
Earnings before interest,
taxation, depreciation and
amortisation (EBITDA) 70 082 57 374 126 341
Headline earnings per ordinary
21.0 19.2 39.6
share (cents)
Diluted headline earnings per
20.9 18.9 39.1
ordinary share (cents)
Weighted average number of shares
195 798 195 798 195 798
in issue* (000s)
Weighted average number of shares
in issue for purposes of dilution*
(000s) 196 782 198 827 198 024
*adjusted for treasury shares
Reconciliation between earnings
for the period attributable to
ordinary shareholders and headline
earnings
Earnings attributable to ordinary
40 938 37 459 77 320
shareholders
Loss on disposal of assets 119 29 142
Earnings for the purpose of basic
and diluted headline earnings per
share 41 057 37 488 77 462
Condensed Consolidated Statements of Financial Position as at 31 August
2013
Unaudited Unaudited Audited
31 August 31 August 28 February
2013 2012 2013
R?000 R?000 R?000
ASSETS
Non-current assets 223 888 131 117 190 216
Property and equipment 67 067 56 815 66 682
Goodwill 85 191 15 596 51 625
Other intangible assets – software 16 673 9 485 15 579
Investment in joint venture 977 2 190 744
Long-term receivables - 116 -
Finance lease receivable – long-
29 727 19 435 30 266
term
Deferred taxation assets 24 253 27 480 25 320
Current assets 720 754 678 918 707 815
Current taxation asset - 4 511 -
Finance lease receivable – short-
30 576 16 896 24 661
term
Inventories 57 310 30 194 36 500
Trade and other receivables 387 310 339 603 372 893
Cash and cash equivalents 245 558 287 714 273 761
TOTAL ASSETS 944 642 810 035 898 031
EQUITY AND LIABILITIES
Capital and reserves 512 790 470 512 491 630
Share capital 21 21 21
Share premium 35 934 36 187 35 962
Treasury shares (42 333) (42 249) (42 335)
Equity-settled share scheme
41 581 34 201 37 801
reserve
Retained earnings 477 587 442 352 460 181
Non-current liabilities 60 413 41 821 47 800
Loans payable – long-term 17 000 - -
Deferred revenue – long-term 14 104 24 013 18 126
Finance lease payables – long-term 29 309 17 808 29 674
Current liabilities 371 439 297 702 358 601
Trade and other payables 258 895 225 051 235 620
Provisions 1 568 2 539 1 800
Deferred revenue – short-term 42 376 52 111 43 775
Finance lease payables – short-
29 250 14 880 22 591
term
Current tax liabilities 11 858 11 6 028
Loans payable – short-term 24 575 - 45 750
Lease smoothing liability 2 917 3 110 3 037
TOTAL EQUITY AND LIABILITIES 944 642 810 035 898 031
Net asset value (adjusted for
261.9 240.3 251.1
treasury shares) per share (cents)
Tangible net asset value (adjusted
for treasury shares) per share 209.9 227.5 216.8
(cents)
Weighted average number of shares
195 798 195 798 195 798
in issue (000s)
Condensed Consolidated Statement of Changes in Equity for the six months
ended 31 August 2013
Equity
settled
share
Share Share Treasury scheme Retained
capital premium shares reserve earnings Total
R?000 R?000 R?000 R?000 R?000 R?000
Balance at 29
21 37 522 (39 720) 30 101 443 129 471 053
February 2012
Profit for the
- - - - 37 459 37 459
period
Treasury shares
- - (2 529) - - (2 529)
movement
Share-based
- - - 4 100 - 4 100
payments
Dividend paid - - - - (38 236) (38 236)
Loss on sale of
- (1 335) - - - (1 335)
treasury shares
Balance at 31
21 36 187 (42 249) 34 201 442 352 470 512
August 2012
Profit for the
- - - - 39 861 39 861
period
Treasury shares
- - (86) - - (86)
movement
Share-based
- - - 3 600 - 3 600
payments
Dividend paid - - - - (22 032) (22 032)
Loss on sale of
- (225) - - - (225)
treasury shares
Balance at 28
21 35 962 (42 335) 37 801 460 181 491 630
February 2013
Profit for the
- - - - 40 938 40 938
period
Treasury shares
- - 2 - - 2
movement
Share-based
- - - 3 780 - 3 780
payments
Dividend paid - - - - (23 532) (23 532)
Loss on sale of
- (28) - - - (28)
treasury shares
Balance at 31
21 35 934 (42 333) 41 581 477 587 512 790
August 2013
Condensed Consolidated Statement of Cash Flow for the six months ended 31
August 2013
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 August 31 August 28 February
2013 2012 2013
R?000 R?000 R?000
Profit before taxation 59 021 54 653 112 519
Adjusted for non-cash items 12 188 6 407 11 765
Working capital changes (23 103) (8 350) (6737)
- Inventory (20 163) 4 570 (1 736)
- Trade and other receivables (10 242) (49 592) (75 402)
- Increase in finance lease
(5 376) (7 626) (26 222)
receivables
- Trade and other payables 12 678 44 298 35 623
Cash generated from operations 48 106 52 710 56 547
Net interest received 5 654 6 094 10 653
Dividend paid (23 532) (38 236) (60 268)
Taxation paid (11 438) (21 375) (28 406)
Net cash inflow/(outflow) from
18 790 (807) (21 474)
operating activities
Net cash outflow from investing
(49 114) (30 935) (89 462)
activities
Net cash inflow from financing
2 121 6 079 71 320
activities
Net (decrease)/increase in cash
(28 203) (25 663) ( 39 616)
and cash equivalents
Cash and cash equivalents at the 273 761 313 377 313 377
beginning of the period
Cash and cash equivalents at the
245 558 287 714 273 761
end of the period
Basis of Preparation
The condensed consolidated financial statements of the Group are prepared
as a going concern on a historical cost basis except for certain financial
instruments, at amortised cost or fair value. The condensed consolidated
financial statements have been prepared in accordance with the framework
concepts and the measurement and recognition requirements of International
Financial Reporting Standards (“IFRS”), the SAICA Financial Reporting
Guides, as issued by the Accounting Practices Board, the Financial
Reporting Guides, as issued by the Financial Reporting Standards Council
and the information as required by IAS 34: Interim Financial Reporting,
the Listings Requirements of JSE Limited (“the Listings Requirements”),
and the Companies Act of South Africa (Act 71 of 2008) as amended. The
principal accounting policies, which comply with IFRS, have been
consistently applied in all material respects in the current and
comparative years.
The condensed consolidated financial statements of the Group have not been
reviewed or audited by the Group?s auditors. The condensed consolidated
financial statements of the Group were prepared under the supervision of
Elizabeth Naidoo, CA (SA), the Financial Director of the Group.
Subsequent Events
No material events have occurred between the six month period ended 31
August 2013 (“interim period”) and the date of this announcement.
The Business of Datacentrix
Datacentrix is a South African-based, empowered company that provides
integrated ICT solutions and services across the full information value
chain to enterprise organisations. Its philosophy is to enable clients?
business strategies through the use of technology. With an established
reputation as an innovative solutions integrator, Datacentrix prides
itself on its customer-centric approach, consistently high service
delivery levels, and strong vendor and client partnerships.
Commentary
The board of directors of Datacentrix (“Board”) announces financial
results for the interim period ended 31 August 2013. The interim period
has seen positive developments for the Group, highlighted by growth in
both the Managed Services and Infrastructure areas of the business,
cementing its position as a value-driven, services-led company.
The Group generated revenue of R1 billion for the six months. Earnings
before interest, taxes, depreciation and amortisation (“EBITDA”) grew by
22% to R70.1 million. EBITDA margin increased from 5.9% to 6.9%. Earnings
increased from R37.5 million to R40.9 million and headline earnings per
share (“HEPS”) increased from 19.2 cents to 21.0 cents. Interest earned
has declined compared to previous years, due to the capital investments
and increased working capital requirements. Despite continued investments
to drive organic growth and repositioning the Group, operating margin
improved by 11% to 5.5%. The Group maintained sound financial and
operational discipline, with cash generated from operations amounting to
R48.1 million, reflecting a closing cash balance of R245.6 million.
Operational Review
Group performance was characterised by growth in solutions sales in
Managed Services and Infrastructure. The Group has seen improved
performance from the strategic investment areas. The continued focus on
intelligent, higher value solutions is contributing positively to Group
performance, with areas such as security, data centres and storage
solutions in particular gaining good acceptance in the marketplace. The
change in revenue mix in favour of solutions/systems integration higher up
the value chain, in the Infrastructure division, has contributed to its
improved operating margins.
A significant portion of Group revenue was generated in the private
sector. Public sector revenue growth remains a significant challenge for
Datacentrix.
Head count growth in human resources in the Group slowed in the reporting
period resulting in payroll costs being contained. Capital expenditure on
necessary infrastructure in support of the Group?s strategy resulted in a
63% increase in depreciation. Total costs were well managed to take into
account the realities of the current economic environment.
The Managed Services division contributed 45% of Group profit before tax
(“PBT”), while the Infrastructure division contributed 42%.
Segmental Analysis
Business
Infrastructure Managed Services Corporate Total Group
Solutions
Unaudited
six 31 Aug 31 Aug 31 Aug 31 Aug 31 Aug 31 Aug 31 Aug 31 Aug 31 Aug 31 Aug
months „13 „12 „13 „12 „13 „12 „13 „12 „13 „12
ended R?000 R?000 R?000 R?000 R?000 R?000 R?000 R?000 R?000 R?000
1 008
Revenue 700 810 719 194 234 864 193 809 73 250 63 723 - - 976 726
924
Operatin 24 951 19 159 28 985 21 540 2 055 7 860 - - 55 991 48 559
g profit
Net
interest - - (2 272) (648) - - 5 302 6 742 3 030 6 094
received
Profit
before 24 951 19 159 26 713 20 892 2 055 7 860 5 302 6 742 59 021 54 653
taxation
Income (7 734) (5 363) (8 281) (5 850) (637) (2 200) (1 431) (3 781) (18 083) (17 194)
tax
expense
Earnings
for the
period
attribut
able to 17 217 13 796 18 432 15 042 1 418 5 660 3 871 2 961 40 938 37 459
ordinary
sharehol
ders
Managed Services
Revenue in the Managed Services division increased by 21.2% with healthy
contributions from the Managed Print Services and Outsourcing businesses.
Operating margins improved despite higher depreciation charges as a result
of investments in supporting infrastructure. The Managed Services division
has improved its operating margins to 12.3%, contributing 45% to Group
earnings.
The acquisition of eNetworks, as noted in the SENS announcement on 27
August 2013, had an effective date of 1 May 2013 and the results have been
included at such date.
Infrastructure
As part of the Group?s strategy, the Infrastructure division has evolved
towards becoming a solutions provider within the infrastructure segment of
the market. It continues to be a leading provider of total, integrated IT
solutions and related services, from consulting, designing, provisioning,
deployment through to ongoing support.
Operating margin increased significantly from 2.7% to 3.6% on marginally
lower revenue. The investment in skills over the last few years and
continued focus on selling solutions has resulted in higher operating
margins.
New investment areas are starting to impact profitability positively.
Working capital requirements, as predicted, is on the increase as we move
increasingly to a solutions/systems integration business.
Business Solutions
The Business Intelligence and Enterprise Resource Planning businesses
showed a marginal improvement in profitability for the six months.
The NokusaEI acquisition, which has contributed positively to the
performance of the Enterprise Information Management (“EIM”) business, has
positioned the Group as the leading EIM solutions and services provider in
the country. In particular, it has enhanced the management capability,
skills and expertise. Earnings of the Business Solutions division were
however largely negatively impacted by the Groups? Gauteng EIM operation.
This has effectively offset good performances in the regional operations
and the acquired entity.
Prospects
The Datacentrix Group will continue on its path as a skills, services and
solutions-led organisation, supported by top level vendor accreditations.
The Company believes that this value-driven, customer-centric approach
will fortify its position as one of the leading ICT players within the
local market. We will also continue to look for suitable acquisition
opportunities to broaden our reach and further grow our skills base.
Black Economic Empowerment
Datacentrix is a Level 2 (AAA) B-BBEE Contributor status, with 125%
procurement recognition.
Directorate
In compliance with paragraph 3.59 of the Listings Requirements, the Board
notified its shareholders on 15 July 2013 that Mr Pete Backwell,
Independent Non-executive director of the Board, will assume the role of
Lead Independent Non-executive director and member of the Nominations
Committee with immediate effect. Ms Thenjiwe Chikane, who served on the
Board for the last 4.5 years, resigned as independent non-executive
director with effect from 19 August 2013. The Board thanks her for the
contribution she has made during her tenure with the Company.
Dividend
In respect of the six month interim period ended 31 August 2013, the Board
declared a gross cash dividend of 12.32 cents. The proposed dividend for
August 2013 is payable to all shareholders on the Register of members on
Friday, 1 November 2013. In terms of the dividends tax, effective 1 April
2012, the following additional information is disclosed:
* the local dividend tax rate is 15%;
* the dividends will be payable from income reserves;
* no STC credits have been utilised. Accordingly, the dividend to utilise
in determining the dividends tax is 12.32 cents per share;
* the dividend tax to be withheld by the Company amounts to 1.848 cents
per share;
* therefore the net dividend payable to shareholders who are not exempt
from dividends tax amounts to 10.472 cents per share, while the gross
div2idend payable to shareholders who are exempt from dividends tax
amounts to 12.32 cents per share;
* the issued share capital of the Company at the declaration date
comprises of 205 265 683 ordinary shares; and
* the Company?s income tax reference number is 9739/002/71/6.
Declaration date: Tuesday, 8 October 2013
Last day to trade: Friday, 25 October 2013
Share trade ex-dividend: Monday, 28 October 2013
Record date: Friday, 1 November 2013
Payment date: Monday, 4 November 2013
Share certificates may not be dematerialised or rematerialised between
Monday, 28 October 2013 and Friday, 1 November 2013, both days inclusive.
For and on behalf of the Board:
Gary Morolo
Chairman
Ahmed Mahomed
Chief Executive Officer
8 October 2013
Gary Morolo (Non-executive Chairman), Ahmed Mahomed (Chief Executive
Officer), Alwyn Martin*, Antony Ball*, Dudu Nyamane*, Elizabeth Naidoo
(Financial Director), Peter Backwell* (*independent, non-executive)
Company Secretary: Ithemba Governance and Statutory Solutions Proprietary
Limited
Registered Office: Sage Corporate Park North, 238 Roan Crescent, Old
Pretoria Road, Midrand
Transfer Secretaries: Computershare Investor Services Proprietary Limited,
70 Marshall Street, Johannesburg
Sponsor: Merchantec Capital
Date: 08/10/2013 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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