ICT integrator Datacentrix has placed significant emphasis on strengthening its management team and developing the skills of its personnel. This has created sound structures within the organisation that have overseen its steady performance despite the tough economic environment.
Datacentrix released interim results yesterday, revealing that earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 8% to R79,7-million. Although revenue dropped slightly from R699,2-million from the comparable period to R687,6-million, the company's operating profit grew by just under R3-million. Revenues increased in both its managed services and business solutions divisions, with only the infrastructure division suffering from the economic slowdown.
"Datacentrix has benefited from investments in targeted new skills and competencies amongst its higher earning employees," says Frost & Sullivan ICT analyst Silvia Hirano Venter. "As it does not look at retrenching, it sees other companies' staff retrenchments as an opportunity to hire more skilled personnel in the market."
The company has won the contract to provide printing services to the FIFA World Cup in 2010, across all the stadiums. This has boosted its outsourced solutions business.
"Datacentrix also foresees a growth in this segment and is therefore ensuring that it delivers high quality services," Venter says. "The investment into training its in-house skills is one of the factors contributing to this strategy. The company also expects to increase its services and solutions range, as well as its footprint, by organic growth."
Venter adds that Datacentrix's partnership with business intelligence (BI) specialists Harvery Jones, is bringing significant benefits. HJ has worked with Datacentrix since 2002 and Frost & Sullivan expects the number of potential businesses to grow through this strategy.
"Datacentrix's strengths in hardware and solution sales are likely to complement Harvey Jones' products and focus areas," she says. "The partnership also expands Datacentrix's expertise area and strengthens its business solutions division, which experienced a difficult year in 2008."
The company announced an interim dividend of 13.4 cents per share.
"Management is encouraged by the Group’s overall performance during the past six months," says Ahmed Mahomed, Datacentrix CEO. "Given prevailing economic conditions, we have maintained our footing and most businesses have shown healthy growth in the six months under review. This is credited to our ability to retain existing clients, signing of new business and new clients, and a strategy of broadening our portfolio.
"Strategic growth areas have shown robust performance and we will continue to judiciously invest in these growth areas that are closely aligned to our core focus."
Furthermore, says Mahomed, the Datacentrix Managed Services Division has shown significant growth in most of its businesses including Managed Print Services, Outsourcing and Resourcing.
"Our Managed Print Services and Outsourcing revenue has seen healthy growth and we are pleased with the Outsourcing business unit’s recent appointment by a leading telco as the maintenance partner for its desktops and service desk environment. We are also happy to report the renewal of a significant outsourcing contract that had come to term, reaffirming the group’s execution capability."
The Business Solutions Division is seeing growth from its existing ERP clients seeking improved capabilities from current systems. Datacentrix’ Business Process Management (BPM) clients, Vodacom and Medihelp, recently received awards at IT Web’s inaugural BPM Excellence awards ceremony. The Enterprise Content Management business has had a robust performance and continues to improve its contribution to the Group’s results.
In terms of partnerships, Datacentrix has solidified its position as an HP partner sporting the highest level of accreditation in various specialisations. It retained its status as an IBM Premier Partner and Microsoft Gold Certified Partner.
The group has made a strategic investment in resources over the last year or more, particularly in the data-centre and managed services capability.
"In fact approximately 130 new staff will be employed for the outsource contract with the aforementioned telco company; in addition we needed to ensure that our recently opened Eastern Cape presence has access to the resources it requires and this will result in the expansion of our complement to around to 1 000 employees. Over 300 of the total resource pool will be based at client sites," says Mahomed.
The group’s senior management team was bolstered with the promotion of Kenny Nkosi to the position of MD for the government business with effect from 1 September 2009. "He brings a wealth of experience and we have full confidence in his ability to take us to the next level in this sector," Mahomed says.
The current economic turmoil afforded Datacentrix the opportunity to strengthen its management team further through the recruitment of senior management skills who became available within the marketplace. The group is committed to investing in its management and execution capabilities and to enhancing its competitive position to capture opportunities in the markets.
"While there has been much talk of ‘green shoots’, the macroeconomic environment remains challenging and uncertain, resulting in limited visibility of future trading conditions. We however expect to maintain market share in an unmistakably tough environment," adds Mahomed.