Annual Financial Report


 

TIDMDDT 
 
RNS Number : 2927W 
Dimension Data Holdings PLC 
17 November 2010 
 

 
 
 
          Dimension Data Reports Strong Results and Market Share Gains 
    Systems Integration, Managed Services and the US - all deliver stand-out 
                                  performances 
 
Unaudited results for the year ended 30 September 2010 
 
 
Financial Performance Summary 
 
·      Revenue growth of 19.4% in reported currency, and 9.9%(2) in constant 
currency 
·      Product revenues up 11.3%(2), strong second half recovery 
·      Continued growth in Managed Services revenue, up 13.2%(2) 
·      Continued robust performance from the Systems Integration business 
·      Operating profit up 22.3%(1)  in reported currency, and 8.2% (1,2) in 
constant currency 
·      Operating margin (1) 5.0% (2009:  4.9%) 
·      Exceptional costs of $15.2 million relating to NTT transaction 
·      Earnings per share (1) 9.0 cents (2009: 7.6 cents) 
·      Total cash $613.6 million (net cash $435.4 million) 
 
 Notes: 
1.     Before exceptional items. 
2.     Adjusted for the impact of currency movements and, where relevant, before 
eliminating intercompany revenue. 
 
 
London (UK) and Johannesburg (South Africa), 17 November 2010 - South 
African headquartered specialist solutions and services provider, Dimension Data 
Holdings, today announced a strong set of results for the year to end-September 
2010. 
 
Revenue for the period was $4.74 billion, up 19.4% in reported currency over the 
prior period.  These reported results were supported by the appreciation in the 
average exchange rates for the year of some of the Group's main trading 
currencies (in particular the South African Rand and the Australian Dollar) 
against the US dollar.  In constant currency, Group revenues grew by 9.9%. 
Operating margin expanded slightly to 5.0% (2009: 4.9%) and operating profit was 
$237.8 million, up 8.2% on the prior year. 
 
The Group's Systems Integration business delivered a very strong performance 
across all regions, growing revenue by 14.9% to $3.89 billion and operating 
profit by 31.8%, to $183 million, at an operating margin of 4.7%. 
 
Group product revenues bounced back at $2.73 billion, up 11.3% in constant 
currency, while Services were $2.02 billion, up by 8.2%.  Good Services growth 
in Systems Integration was supported by Managed Services growth of 14.1% and 
Professional Services growth of 14.7%.  Internet Solutions showed strong growth, 
but this was offset by a sharp decline in Plessey. 
 
The Group's effective tax rate was 27.4% (2009: 26.7%), while earnings per share 
were 9.0 cents compared to 7.6 cents in 2009. 
 
Commenting on the Group's overall performance, Brett Dawson, CEO of Dimension 
Data Holdings said, "The Group's vision of the market evolution which focuses on 
key, high-growth technology sectors including the network, unified 
communications and collaboration, and virtualisation, continues to stand us in 
good stead.  Our growth rates are greater than the market, implying market share 
gains in nearly all of our areas of focus." 
 
The Group was recognised throughout the year for its industry leadership, 
receiving 96 industry and partner awards.  From an employee perspective, for the 
fifth consecutive year since the initiation of the Group's employee satisfaction 
survey, the employee satisfaction results increased. 
 
In this review, growth rates are in relation to FY 2009 and, unless otherwise 
indicated, are calculated before eliminating intercompany revenue and are 
adjusted for the impact of currency movements (i.e. constant currency). 
 
Regions improve profitability within Systems Integration 
 
The Americas delivered an excellent increase in operating profit, up to $25.1 
million from $5.5 million in 2009, driven by an excellent recovery in the US. 
Revenue was up 34.6%, the result of a recovery in Product volumes but also 
excellent Managed Services growth of 27.4% where the region recorded some good 
multi-year contract wins.  Operating margin was up from 1.0% to 3.5%.   Outside 
the US, Mexico delivered very good revenue and operating profit growth, while 
Brazil showed a much improved performance in the second half. 
 
In Asia revenues were up by 17.6%.  Operating profit increased slightly to $53.3 
million (2009: $53.0 million), constrained by continued progress on a planned 
investment programme. An operating margin of 7.2% was achieved. 
 
Revenues in Australia were up by 8.2%.  Services growth of 22.9% was 
particularly strong.  Operating profit and operating margin grew to $34.8 
million and 5.3% respectively (2009: $23.1 million and 4.6%). 
 
Europe's 
revenues grew by 8.0%, a very strong performance given continued constrained 
macro-economic conditions in the region.  Operating profit improved to $34.2 
million (2009: $29.5 million) at an operating margin of 3.3% (2009: 3.1%). 
Within the region, Germany, the UK and the Benelux countries reported strong 
performances.  Spain was weak, and Switzerland recorded some improvement off a 
low base compared to the previous period. 
 
The Group's Middle East & Africa 
business grew revenues by 9.7%.  Operating profit and operating margin were 
strongly up to $53.7 million and 8.2% respectively (2009: $33.6 million and 
6.4%). The Group's Emerging Africa operations reported a solid increase in 
operating profit, with good traction in the region for the Group's services 
offerings. 
 
Five acquisitions made during the year under review are expected to increase 
the Group's global footprint and enhance its specialist IT solutions and 
services capabilities in selected geographies.  These include the acquisition of 
interests in a Moroccan systems integrator, a Chilean systems integrator, an 
Australian infrastructure hosting business, an African Wi-Fi provider, and 
mVision, a UK video conference integrator. 
 
 
 
Other Group businesses 
 
Turning to the Group's other businesses, Internet Solutions grew revenue by 
10.5% with good growth in its Communications, Cloud, and Carrier business units. 
 The Plessey business experienced tough trading conditions during the year: 
revenues were down by 43.2%, however, the second half saw an encouraging 
improvement in conditions. 
 
 Merchants delivered a solid performance. 
Product pricing pressures caused by the strong Australian and New Zealand 
currencies during the period resulted in a 2.3% decline in Express Data's 
revenue. 
 
 
 
Lines of Business 
 
 
Across the lines of business, Network Integration delivered strong growth of 
13.1% - more than twice the forecast market growth rates.  This growth was 
driven mainly by a strong recovery in Product revenues, especially in data 
centre networking, wireless and mobility.  Growth was also supported by success 
in multinational contracts and in the Group's Managed Services base. 
 
Looking at the other lines of business, Microsoft Solutions line of business 
grew revenue by 20.1%; Security Solutions revenues increased by 19.8%; Converged 
Communications line of business ended 18.4% up on 2009, and Data Centre 
Solutions increased by 32.2%.  Dimension Data's Customer Interactive Solutions 
(CIS) line of business recorded a decline of 1.8%, which represents a decline in 
Product revenues offset by an excellent performance in Managed Services. 
 
 
 "Our employees around the globe have worked extremely hard to build our 
business and I want to thank them for their commitment, focus, and steadfast 
pursuit of excellence on behalf of our clients. 
 
 "In the last seven years 
we have doubled the business and expanded from operating in 29 countries to 49 
countries. We've built a winning culture and are widely recognised in many 
countries around the world as one of the best places to work.  We continue to 
aggressively build on our value proposition across our Solutions and Services on 
a day-to-day basis," said Dawson. 
Outlook 
 
 
Dawson believes the opportunities ahead for Dimension Data remain exciting. 
"Dimension Data's solutions and services are well-suited to our clients' needs. 
We will continue to strive for growth rates greater than market average. 
 
"We believe that the network is the core platform for all forms of 
communications and IT. Technologies and services which are reliant on the 
network will only grow over time and we are well-placed to continue to exploit 
this opportunity. 
 
"We place enormous emphasis on our outstanding employee base of technology and 
managed services specialists with the skills to offer value-added solutions and 
services to our clients - particularly in the areas of unified communications 
and collaboration, virtualisation, and network performance and optimisation. 
We will continue to invest in our employees to enable them to provide leading, 
world class capabilities to our clients. 
 
"Our services journey remains on track and we envision Dimension Data developing 
and taking to market a richer array of Managed Services in the future. 
Increasingly our services opportunities are multi-year Managed Services, and we 
expect this to increase going forward," Dawson concluded. 
 
Note: Subsequent to the year end, Dimension Data was wholly acquired by NTT. 
Dimension Data has made applications to cancel the listing of Dimension Data 
Shares from the Official List of the United Kingdom Listing Authority and from 
the Main Board of JSE Limited (the "JSE") and has made applications to cancel 
admission to trading in Dimension Data Shares on the London Stock Exchange (the 
"LSE") and JSE's markets for listed securities (together the "Delisting"). The 
proposed Delisting is expected to take effect on 14 December 2010. 
 
 
About Dimension Data 
Dimension Data plc (LSE:DDT), a specialist IT services and solutions provider, 
helps clients plan, build, support and manage their IT infrastructures. 
Dimension Data applies its expertise in networking, converged communications, 
security, data centre solutions, Microsoft and contact centre technologies, and 
its unique skills in consulting, integration and managed services to create 
customised client solutions. 
www.dimensiondata.com 
 
 
-ends- 
 
 
 
 
 
 
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            The company news service from the London Stock Exchange 
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