Didata seeking acquisitions to boost services business - TechCentral

Didata seeking acquisitions to boost services business

Dimension Data CEO Brett Dawson

Dimension Data, the SA technology group now owned by Japan’s Nippon Telegraph & Telephone (NTT) Corp, remains on the prowl for acquisitions following the recent purchase of US-based cloud computing specialist OpSource.

CEO Brett Dawson says the group has enjoyed a “number of significant wins” in managed services and IT outsourcing. “We are also investing aggressively in expanding the scope of our service offerings, both organically and through acquisitions,” he says.

Dawson’s comments come as Didata reports it turned in an operating profit of US$74m in the three months to the end of June, an increase of 14,7% compared to the same quarter a year ago.

The improvement was driven mainly by strong performance in its services business, where revenue rose by 10,9%. Group revenue climbed 4,7% to $1,46bn, held back by a 0,2% increase in product sales.

Though Didata is no longer listed in London and Johannesburg following NTT’s blockbuster R24,4bn acquisition of the group in 2010, it has undertaken to continue publishing its financial results.

In the latest period, gross margins climbed to 21,5%, with gross profit growing by 12%.

Revenue from its Systems Integration (SI) business grew by 3,5% in constant currency. Product declined by 2.3% off the back of generally slower trading conditions in the US and Europe. Services in the SI business grew by 12%, with managed services up by 12,6% and professional services by 11%.

Didata’s telecommunications service provider Internet Solutions increased revenues by 5,1%, with operating profit showing a strong 20,6% improvement. At Plessey, sales soared by 21,2% and Express Data’s revenues, including acquisitions, grew 11,4%.

Group revenues for the first nine months of the year to end-June were up 13,4% in constant currency to $4,2bn, with product growing by 13,1% and services by 13,6%. In reported US dollar terms, the revenue growth would be several percentage points higher, given the relative weakness of the US currency during the period.

For the nine months, the SI business increased sales by 13,7%, while operating profit grew 13,3% at an operating margin of 4,3%. Internet Solutions’ revenues increased by 6,9%, with operating profit up 3,3%. Plessey grew strongly at both the revenue and operating profit levels off a very low base in the prior year, while Express Data grew revenues by 19.5% (excluding acquisitions by 15.9%).

Overall, group operating profit for the nine months was up by 14,2% to $203,7m.  — Staff reporter, TechCentral

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