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Datacentrix celebrates 10 years with solid results

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Datacentrix Holdings has announced positive results for the financial year ended 29 February 2008 for the tenth consecutive year. 

Revenue of R1,35-billion was achieved. Earnings before interest, taxation, depreciation and amortisation (EBITDA) is up 26% to R157,1-million, headline earnings per share (HEPS) increased 29% to 52 cents per share and basic earnings per share (EPS) grew 30% to 52 cents per share. Cash on hand is R221,9-million at 29 February 2008.
Over the past 10 years, Datacentrix has transformed from a small Pretoria IT hardware company into a national IT infrastructure, solutions and services provider with ten year annual compound growth in revenue of 31% to over R1-billion, profit after tax growth of 27% to over R100-million and cash holdings in excess of R200-million.
According to Datacentrix chairman, Gary Morolo, the company has not missed a beat over the past year. "Thanks to our carefully planned succession strategy, Datacentrix’ new management team, headed up by newly appointed CEO, Ahmed Mahomed, has ensured that the fundamentals and prospects of the company remains positive.
"Now in its tenth year as a listed company, we are delighted to note that Datacentrix has survived in the same form in which it originally listed, something that cannot be said of many of its peers who came to the market during the listing boom of the late 1990s.
"Datacentrix’ basic business philosophy of being financially conservative, focusing on business basics and organic growth as well as concentrating on satisfying current customer needs has served it well over the past 10 years and we see very little reason to change this winning formula," Morolo says. "The company has a board with a strong governance ethos, something that has greatly contributed to Datacentrix’ admirable business ethic and unblemished corporate reputation. The board has recently been strengthened with the appointment of Dudu Nyamane as an independent, non-executive director. She brings a wealth of experience in human capital management in the IT industry."
Datacentrix has seen great success within the targeted growth areas of Selective Outsourcing, Managed Print Services and Security as well as the Johannesburg market.
In addition, the past year has seen Datacentrix being awarded a number of vendor partner awards, including HP’s "channel partner of the year" for both the Imaging and Printing and Technology Solutions groups and "the highest consistent growth for the StorageWorks Division" awards.
Frost & Sullivan believes that Datacentrix's performance shows there is still room for organic growth within the competitive South African IT market.
While many other local IT companies are looking for opportunities offshore or pursuing acquisition strategies, Datacentrix has focused on the service opportunities, it says.
“Datacentrix has exhibited a good performance through its organic growth approach,” says Frost & Sullivan ICT analyst Letticia Nkumbula. “Going by the experience that the company has gained in the services market thus far, and the signing of long term outsourcing contracts, it is likely that Datacentrix’s current focus on outsourcing services will prove to be a success.”
Nkumbula believes that a growing number of enterprises will turn to outsourcing all or part of their IT infrastructure to manage costs. This will continue to create opportunities for companies like Datacentrix.
Analysis conducted by Frost & Sullivan last year suggests that the South African IT infrastructure outsourcing market will double in value between 2006 and 2013. It is estimated that it will be worth a total of $5,6-billion within the next four years, despite certain challenges.
“Increasing interest rates and high inflation will have a profound impact on technology imports, which are normally required to provide outsourced services,” Nkumbula cautions. “Nonetheless, there are excellent business opportunities in this market, given the likelihood that enterprises turn to outsourcing services as a means of reducing costs.”
Nkumbula also notes that the while the company has indicated that it will continue to look for organic growth, its strong cash position will support any niche acquisition plans it may have going forward.