DIDATA ASIA UNIT LIFTS PROFIT 47 PERCENT

Mergers, Acquisitions and Financial Results

Datacraft  Asia,  a unit of the South African-based IT group Dimension Data (Didata) -- has delivered a 7% increase in revenue for the first quarter to December to $128,7m, it said on Friday.

Pre-tax profit increased 39% to $8,5m, while profit attributable to shareholders leapt 47% to $6,2m, and cash and short-term investments were up 16% at $147,9m.

The group attributed the strong growth in revenue to a 13% increase in services revenue to $48,1m and a 3% rise in hardware revenue to $80,6m.

However, when compared with the fourth quarter of the 2006 financial year -- traditionally a strong quarter for the group -- revenue declined 2% to $2,2m, the group said.

In its 2006 financial year, Singapore-listed Datacraft Asia boosted its parent company's revenues 15,7%.

"I am pleased to kick off the new fiscal year with a strong 13% growth in our services business and a gross margin of 19,2% in the first quarter," said Datacraft CEO Bill Padfield. "We also ended the quarter with the highest backlog in five years at $156m, boosted by growth in annuity service contracts as well as hardware orders.

"Clearly, our strategy of focusing on more profitable, services-attached business and emphasis on productivity has paid off."

Padfield said that the second-quarter outlook remained positive, underpinned by a healthy backlog, although overall gross margin might moderate due to the increase in hardware backlog.

"The prevailing market trends look favourable and demand for our solutions and services remains healthy, particularly in the areas of internet protocol convergence and multisourcing. Our priority for the current financial year is to continue to drive services opportunities and build on our solid fundamentals," he said.

Business Day