London (UK) and Johannesburg (South Africa), 14 November 2007 – Dimension Data Holdings plc (‘Dimension Data’ or the ‘Group’) a leading global IT services and solutions provider today announced its results for the period ended 30 September 2007.  The results have been prepared in accordance with International Financial Reporting Standards.

Financial Highlights

·         Total revenues up by 23.0% to $3.8 billion

·         Services revenue up 25.8% to $1.5 billion

·         Gross margin 21.5% (2006: 21.1%)⁽¹⁾

·         Operating profit ⁽¹⁾ up 55.0% to $131.0 million (2006: $84.5 million)

·         Operating margin ⁽¹⁾ up by 0.7% to 3.5%

·         Earnings per share ⁽¹⁾ up by 180.0% to 5.6 cents (2006: 2.0 cents)

·         Cash from operating activities $179.5 million (2006: $12.5 million)

Notes:

(1)                 Before exceptional items. 

Operational Highlights

For Dimension Data, the financial year to end September 2007 has been a period of outstanding progress.  The Group achieved tremendous improvements in financial performance driven by strong growth in all its key financial metrics. 

Revenue for the year was $3.8 billion, an increase of 23% over the previous year.  Of this, Product grew by 16.0% and Services by 25.8%. Gross profit for the year was $813 million, up 23.4%, translating into a 0.4% improvement in gross margin to 21.5%. 

Operating profit was $131 million - a year on year increase of 55%, and the Group’s operating margin improved from 2.8% to 3.5%.

Earnings per share increased 180% to 5.6 US cents per share.  In addition, cash and cash equivalents, were $459 million (2006: $348 million) demonstrating the Group’s effective management of working capital despite the strong growth recorded during the period. 

Commenting on the results, Dimension Data CEO, Brett Dawson said, “Dimension Data performed exceptionally well in all its Regions and key market segments.”

At a regional level, revenue accelerated in the second half in the Americas and the operating profit accelerated by 72.5%.  Datacraft Asia, the Group’s Asian subsidiary, had an excellent year with revenue growth of 20.5%.  In Australia profit margin improved from 2.9% to 3.7%, resulting in a 50.5% growth in operating profit. Europe recorded excellent revenue growth of 20.3%. The region improved its gross margin by 1.6% to 20.7%.  Revenue for Middle East and Africa grew strongly by 36.9% and the operating profit by 52.3%. 

In particular, Services revenue accelerated across all geographies by a strong 25.8% to $1.5 billion.  Over the past 24 months, Dimension Data has evolved its Services strategy to meet client needs for a full lifecycle of IT Services that help IT management deliver better business value.

Dawson explained, “The evolution in our Services strategy from our traditional plan, build, and support model to include manage, improve and innovate services positions the Group well to capitalise on the market trend toward multisourcing.”

Europe

Russell Bolan, CEO of Dimension Data in Europe said, “The improved performance of most countries in the region was very pleasing.  We are entering the second year of a three-year recovery programme and the impact of the management and business changes have been bedded down and are having a positive effect on revenues.  In addition, our business plan is being met, and our management team has worked very hard to win business and deliver improving efficiencies and profitability.

“The European operations recorded excellent revenue and gross profit growth of 20.3% and 31.1% respectively, while gross margin expanded by 1.6% to 20.7%.  Overheads increased by 26.9%, partly as a result of increased variable overheads (commission and bonus payments).

“Furthermore, “the region invested in systems, sales capacity and skills.  Operating profit grew to $8.5 million at an operating margin of 0.9% from 0.2% in the prior year,” explained Bolan.

During the year, the Group acquired a 100% interest in a Czech network integrator, and disposed of its operations in Sweden.  

Dawson said several years ago the Group identified a number of emerging market trends that it believed would be significant for the industry, its clients and its business.  “We summarised these trends into three main opportunities for Dimension Data: the converged network, the converged client and multisourcing.  Our six lines of business are focused on profiting from these opportunities. Today, it is immensely rewarding to look back on our consistent growth and the rapid market share gains we have made by focusing on these three opportunities.”

The Group’s six lines of business all performed exceptionally well.  For the second consecutive year, a massive growth of 47.8% was achieved by Converged Communications, while Network Integration increased 17.6%.  Security was up by 17.3% and Microsoft Solutions grew 21.2%. Data Centres and Storage (DCS) increased 20.5% and the Group’s Customer Interactive Solutions (CIS) continued to flourish with a 24.5% increase. In addition, Plessey, Internet Solutions and Merchants had very strong years.

Other trends which contributed to the Group’s excellent results included increased opportunities in the mid-sized market and service providers continued investment in their revenue-generating networks.

Looking forward Dawson says Dimension Data will continue to deliver on its business strategy, predict and harness growth opportunities created by major changes in the market, provide operational excellence to our clients, and invest in our people and culture.