Still feeling generous
ROCK STEADY information and communication technology infrastructure company Datacentrix may still distribute a special dividend to shareholders despite not having announced that in its recent full-year results.
The company isn’t strictly in acquisition mode and had said previously that it would continue to look to optimise its capital structure after paying a special dividend in its previous (2006) financial year.
Datacentrix continues to generate good cash from operations and was left with R173,8m even after distributing R72,4m in combined normal and special dividends. And if no acquisitions come along shortly, it will have no use for the money.
Chairman Gary Morolo says it’s retained the cash in case the right opportunity came along in a market where “there’s so much happening at the moment”.
Morolo says it wasn’t specifically eyeing any particular acquisitions but “we wanted to make sure if something comes along that we’ve got the wherewithal to participate”.
However, Datacentrix isn’t known to overpay for assets but there aren’t many cheap ones floating around. “We’d probably distribute some of it at a later stage. That’s still in the range of the possible,” said Morolo.
Meanwhile, shareholders will get another 13,2c/share on top of the 8c/share declared at the interim stage in lieu of ordinary dividends paid out at the more aggressive policy of two times cover on headline earnings a share introduced last year.
Datacentrix reported 41% growth in HEPS to 40,4c/share on a more modest revenue increase of 19% to R1,2bn for the year. Morolo says the significant improvement in operating margin – it went from 8,6% in 2006 to 10,4% in 2007 – was partly because some clients had bought product straight from the vendor but used Datacentrix for the fulfilment of the project. So the benefit went straight to the bottom line.
There was also a better mix with more complex projects, where it bundled together solutions and services.
Morolo is hoping to see services contribute closer to 30% from less than 10% of the business currently.
This was the first results presentation sans one of its original founders after the resignation of Klaas Lammers in November last year. For a 42year-old, his “retirement” seems strange.
However, Morolo says Lammers was involved in starting the company straight out of university and had worked extremely hard at the business for the past 20-odd years.
He now wanted to pursue his interest in flying and do other crazy things outside the ICT sector.
Morolo says that a few years ago a departure by someone of Lammers’s calibre would have hurt the business, but not now. Datacentrix had grown “beyond the founder members” and had the systems, processes and succession planning in place to move forward. Ahmed Mohamed has been appointed COO.
DATACENTRIX... TAKING A BYTE OUT OF THE MARKETSource: I-Net Bridge
Keeping some ammunition for now.