Didata All Set for 'Sweet Spot of IT Spend'

Mergers, Acquisitions and Financial Results

Dimension Data Holdings expects to deliver modest constant currency revenue growth in the year to next September as the IT services solution provider's markets are likely to improve, says CEO Brett Dawson.

"Dimension Data is well placed to capitalise on long-term market trends. Growth in excess of prevailing market rates and medium- term operating leverage remain our key financial objectives," he said in the annual report.

The group was in the "sweet spot of IT and communications spend", and the trends driving superior growth over the past few years had the momentum to continue to drive growth in the medium and long term.

The growth strategy would be largely organic. "We intend to expand into several cities in Brazil and China next year." In addition, two types of acquisitions would be targeted: the first to expand the footprint, and the second where additional skills were required.

Two acquisitions were being completed to expand in Angola and Morocco. The Systems Integration business, which accounts for 80.6% of revenue, delivered services revenue growth from all five regions in the past year, although product revenue came under "enormous pressure". Four out of five regions achieved "significant operating profit expansion and improved profit margins". The Americas region started to recover in the fourth quarter.

Deregulation of SA's telecoms market and growth opportunities in Africa would provide opportunities for Internet Solutions. Plessey would benefit from the opening of the African continent in telecoms services. Express Data was a value-added distributor with "solid prospects".

"Our network-centric offerings are vital for our clients to be able to operate effectively in today's IP and convergence powered environment, where the network is increasingly the core platform for all forms of IT and telecommunications," he said. A strengthening position in unified communications, collaboration, virtualisation and managed services would position the group for medium-term growth. In the longer term, market developments such as cloud computing and services-based models such as IaaS would provide opportunity.

Key areas of client demand in the past year were network optimisation, visual communications, IP telephony, virtualisation and consolidation of data centres and Windows for Microsoft 7.

Clients focused on maintaining and optimising IT infrastructure as capital budgets reduced. The group benefited from a general trend towards standardisation and centralisation of IT to reduce costs and centralise control.

"We reacted to the slowdown in spend in our global client sector by broadening our exposure to clients in the large regional enterprise and commercial segments of the market where we saw relatively better opportunities," Dawson said.

Business Day