Still feel­ing gen­er­ous

Finweek English Edition - - Companies & markets - BELINDA AN­DER­SON

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 MAR­KET

Source: I-Net Bridge

Keep­ing some am­mu­ni­tion for now.

Gary Morolo

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