Strong margin expansion at Datacentrix - TechCentral

Strong margin expansion at Datacentrix

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A shift away from focusing mainly on products and onto more complex value-added IT services appears to be paying off for Datacentrix.

JSE-listed technology group has lifted headline earnings per share year on year by 16% to 24,3c on the back of a 9% improvement in revenue to R1,1bn for the six months ended 31 August 2014.

Operating profit rose by 18% to R66m, while operating margin expanded from 5,5% to 6%. This was due to the shift to higher-value IT solutions revenue and good cost management. The group declared an interim gross cash dividend of just over 8c/share.

“In 2008, product revenue accounted for the largest share of the business. The organisation recognised that the business model would come under pressure due to hardware commoditisation and technology prices declining,” Datacentrix said in notes accompanying its interim financial results.

“Today, the company predominantly delivers complex infrastructure solutions, with a growing managed service, application and cloud business. Its portfolio includes most of the significant enterprise hardware and software vendors.”

Datacentrix comprises three operational divisions, namely managed services, technology and business solutions. These contributed 35%, 50% and 13% to profit after tax respectively.

It said it intends complementing future organic growth with acquisitions.  — © 2014 NewsCentral Media

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