Dimension Data, a multi-billion dollar global IT solutions and
services provider, today announced a strong set of results for the
year to end-September 2010.
Unaudited results for the year ended 30
September 2010
Americas Performance Summary
- Operating Profit Increase to $22.1
million, up from $5.5 million in 2009
- Revenue increased 34.6%, driven by
strong Managed Services growth of 27.4%
- Operating margin up from 1.0% to
3.5%
- Brazil and Mexico deliver strong
performance and growth
Global 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.
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 virtualization, 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 recognized 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.
Note: 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).
Dimension Data’s Systems Integration (SI) business delivered
another robust performance for the year, with a strong recovery in
product volumes, solid Services growth, expanding gross margin and
operating profit up 31.8% to $183.3 million. The recovery in
product volumes, particularly in the second half of the year, and
the continued growth in Managed Services were features of the year,
as was the fact that most regions showed excellent improvement in
profitability.
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.
Americas Region Performance
The Systems Integration business in the Americas delivered
exceptional results, with an increase in operating profit to $22.1
million from $5.5 million in 2009, driven by an excellent recovery
in the U.S. Revenue was up 34.6%, the result of a recovery in
product volumes, as well as Managed Services growth of 27.4% where
the region recorded some good multi-year contract wins.
Additionally, operating margin was up from 1.0% to 3.5%. Outside
the U.S., Brazil showed a much improved performance in the second
half, and solid year-over-year growth, while Mexico delivered very
good revenue and operating profit growth.
Jere Brown, CEO, Dimension Data Americas said, “The outstanding
performance across all Dimension Data lines of business in the
Americas was driven by a combination of factors, including the
strength of our team in leveraging key enterprise technology
trends, solid partner relationships, growth in Managed Services and
expansion in Latin America. Additionally, the Americas received the
highest score in this year’s employee satisfaction survey – a
testament to our unwavering focus on employee career goals and
work-life balance.”
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.
“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
Brown sees strong, continued opportunity for Dimension Data in
the Americas. “We will continue to leverage our position of market
strength as well as the economic recovery to address clients’
evolving requirements – including the shift to IT providers that
can offer end-to-end, IT-telecommunications solutions and a broad
range of managed and professional services.”
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
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