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Dimension Data Results Ahead of the Market

Strong managed services and outsourcing growth underpins solid financial performance in Australia.
  • 19 November, 2009 09:30

<p>Dimension Data, the Australian operation of London and JSE-listed Dimension Data Holdings plc, today announced its results for the year ended 30 September 2009. Although the financial information included in this preliminary announcement has been computed in accordance with IFRS as adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements in December 2009. All figures reported are in US dollars.</p>
<p>Australian Highlights</p>
<p>• Systems Integration revenues growth 9.8%</p>
<p>• Group operating profit up by 23.6% to $39.7 million</p>
<p>• Managed Services revenues up by 17.8%</p>
<p>Global Highlights</p>
<p>• Revenue of $4.0 billion (up 0.4% in constant currency (2))</p>
<p>• Services revenue growth of 13.0% (2)</p>
<p>• Excellent performance from Managed Services, up 21.2% (2)</p>
<p>• Revenue mix drives gross margin expansion to 22.5% (2008: 21.6%)</p>
<p>• Operating profit (1) up 25.4% in constant currency to $194.4 million</p>
<p>• Operating margin (1) expansion to 4.9% (2008: 4.0%)</p>
<p>• Cash balance $600 million, strong cash generation during the year</p>
<p>(1) Before exceptional items.</p>
<p>(2) Before eliminating intercompany revenue and adjusted for the impact of currency movements.</p>
<p>Dimension Data Group CEO, Brett Dawson said: “The results are testament to further success in the execution of our ‘Profitable Growth’ strategy which we embarked on in 2005. Since then we have grown revenues ahead of the market, achieving a four year compound annual growth rate of 12.3%. Improved gross margins and careful management of our cost base has driven operating leverage with the Group operating margin widening to 4.9% from to 2.1% in FY2005. Our operating profit has more than tripled to $194.4 million and over the past five years have generated over a $1 billion in cash from operations.”</p>
<p>Australian Operational Summary and Commentary</p>
<p>The Australia Systems Integration business had a very good year, with revenues up by 9.8% supported by good growth in all lines of business. The business benefited from the Federal Government stimulus package, and from market share gains on the back of ongoing consolidation in the Australian IT services industry.</p>
<p>The investments made over the last 12 to 18 months in managed services delivered revenue growth as well as strong operational leverage. Managed services were up by 17.8%, supported by some good multi-year contracts as the market continued to move towards multisourcing as a preferred IT sourcing option. Professional services declined by 4.4%, impacted in particular by the termination of a Customer Interactive Solutions contract. During the period, the business took a majority shareholding in BlueFire, a company specialising in hosted infrastructure management, or Infrastructure as a Service (IaaS).</p>
<p>This trading performance, together with good cost management, meant that the business, together with Express Data, grew operating profit for the year by 23.6% to $39.7 million.</p>
<p>Dimension Data’s Australian CEO Steve Nola said: “Our performance this year has been excellent given the difficult conditions in the local and global economy during this period. And it’s really pleasing that our increased profitability has come as a result of revenue growth and market share gains, rather than cost-cutting. Our strong results this year are underpinned by the quality of the outsourced and managed services we have provided to our clients, which has resulted in a very high customer retention rate and a strong growth rate in our managed services revenue base.”</p>
<p>“In 2010, we will see increasing demand for very specific managed services offerings, particularly in the areas of security and video conferencing, as well as the more traditional areas of networking and telephony. We are also going to market with a range of hosted and Infrastructure as a Service offerings to cater for a growing client need. In terms of some technology trends, we are expecting continued activity in the area of virtualisation – particularly the virtual data centre – and plenty of opportunities to upgrade and integrate Microsoft technologies, with a range of new product releases receiving significant interest from our client base. We will continue to see take-up of collaborative solutions unifying and integrating communication channels including voice, video, instant messaging, email and social networking.”</p>
<p>About Dimension Data</p>
<p>Dimension Data plc (LSE:DDT), a specialist IT services and solution provider, helps clients plan, build, support and manage their IT infrastructures. Dimension Data applies its expertise in networking, converged communications, security, data centre and storage, Microsoft and contact centre technologies, and its unique skills in consulting, integration and managed services to create customised client solutions.</p>
<p>For further information:</p>
<p>Helen Han</p>
<p>Dimension Data</p>
<p>Tel: +612 8249 5684</p>

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