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DiData revenues, profits surge

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Dimension Data Holdings has reported a 23% increase in revenues and 46% increase in profit for the six months ended 31 March. 

The group's revenue reached $2,2-billion, with particular growth in Asia (more than 30%), Middle East and Africa (more than 20%) and the Americas (more than 24%).
All the lines of business contributed to the strong growth, with network integration up 17%, security gorwing 36% and converged communications up 31%.
Operating profit increased to $85-million – a year-on-year increase of 46% – and operating margin improved from 3,1% to 3,9%.
Dimension Data CEO Brett Dawson comments: “We drive growth from three areas: our regions, lines of business, and services. During the period, the group achieved a successful performance against all three. All regions performed well with revenue growth and improved operating margins in all three. We achieved double digit growth across all our lines of business with substantial market share gains in network integration and security. Our services growth was strong.”
Dawson is optimistic about both the outlook for the second half of the year and the group’s longer-term prospects.
“Building on our strong progress in H1, the key drivers for our business growth are in place. While recognising the recent turmoil in financial services, we are optimistic about the remainder of the financial year. We believe the economic slowdown in several major markets is having some impact on IT spending.
"However, Dimension Data is in a strong strategic and operational position, with the benefit of a robust balance sheet. Our strategy remains clear and unchanged and we continuously review our operational plans to adapt to developing circumstances. We continue to see solid demand in the market for our industry relevant solutions and service offerings and remain confident that the Group is well positioned to drive continued profitable growth.”

As spending on ICT in Africa will not be as affected as in other regions by a global economic slowdown, Dimension Data’s strong presence on the continent is likely to ensure continued growth. Global growth consulting company Frost & Sullivan believes that DiData’s partnerships with local companies in a number of countries have been tactically astute.
The ICT services company released its interim results today, showing revenue growth of just under 23% for both products and services. Revenues from the Middle East and Africa grew to $456.3 million, representing 16.8% of the group’s total revenue.
“African ICT spending will probably not to be impacted by the slowdown happening globally because the continent is in a catch up phase and thus growth is likely to remain high,” notes Frost & Sullivan ICT analyst Spiwe Chireka. “Didata’s presence in the key ICT markets of South Africa, Nigeria and Kenya is likely to prove advantageous.”
Chireka points out that DiData is part of an increasing trend by ICT companies to partner with established companies in African markets rather than setting up entirely new operations. Datatec, which released its annual results today, is persuing a similar strategy in a number of countries.
“There is however a limited focus on the SMME market in the ICT services sector as a whole,” Chireka says. “This applies to Datatec as well. This market is growing fast and as much as it pays to target the large corporations, there is a need to establish a balance between the two. The SMME sector presents the largest potential in the market and whoever realises this and presents a sound proportion of services for this sector is likely to reap sound benefits.”
Chireka believes that the increasing growth of IP telephony in South Africa will be a particularly promising area for growth in all sectors, especially when the commissioned undersea cables become available. As South African businesses are coming round to IP services, it will be no surprise if DiData’s subsidiary Internet Solutions makes strong gains.