Aust team leads charge for a stronger DiData

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After two consecutive loss-making periods, South African integrator Dimension Data returned to profitability in the half year ending 31 March 2004 with its Australian arm leading the group's turnover score.

DiData's interim results release for the half year reported that the company had turned over US$1.17 billion and collected US$9.874 million in operating profits. Actual profit was US$1.369 million – up from a US$225.529 loss in the six months to 30 September 2003.

Australia's overall turnover was the strongest in the global group at US$221.698 million for the six months to 31 March 2004 – no doubt assisted by a stronger Australian dollar. Continental Europe came next, reaping US$220.865 million for the period.

Africa came third, netting US$207.644 million, but won the gong for biggest operating profit.

The African division had an operating margin – before goodwill, amortisation and exceptional items -- of 5.2 percent, propelling DiData's home team to an operating profit of US$10.763 million. Australia had an operating margin of 2.7 percent and operating profit of US$5.902 million.

The interim results revealed that the Australian arm had experienced steady growth in its turnover from managed services, up from US$18.174 million for the six months ended 31 March 2003, to US$27.269 million for the six months ended 31 March 2004.

Steve Nola, CEO of DiData Australia, is planning a year of 'more of the same'. The integrator plans to expand its managed services offering, and deepen its relationships with customers across the board.

'We will be releasing new products and services in the next quarter [but] ... we're pretty comfortable with how we segment and approach the market,' he said.

Security had been a hot area in the last six months and was expected to continue to be so in the coming year, Nola said. The division was also betting on continued strength in solutions and services, he said.

'We're very happy with the Australian results,' he said. 'There has been an up-tick in the marketplace and a lot of decisions we took in the last couple of years, focusing more on the solutions part of the business and services offerings.'

Making comparisons across the different regional groups in DiData was quite difficult, he warned. '[For example] in the US, they're still predominantly focused on network infrastructure,' Nola said.

However, DiData here had 'done a good job' of pushing its solutions focus and strengthening its customer base.

Distribution subsidiary Express Data had also done well, partly as a result of growth in network integration needs and because Cisco had cut its distributor lineup from three to two. Any rumours that Express Data was about to be sold were untrue, he added.

'It is exceeding our budget expectations,' Nola said.

He said that the recent acquisitions of rival integrators KAZ Group by Telstra and Logicalis by IBM were not expected to put any extra pressure on DiData. DiData Australia itself might consider mergers or acquisitions in the coming year, should a suitable opportunity arise, he said.

'We're a very viable and professional business that's been growing. We believe that our strategy in place will be successful. I don't think [those acquisitions] change the landscape,' Nola said.

Further, DiData Australia expected to increase staffing levels by 10 percent – primarily in managed services and security – this year, Nola said.

The Australian arm made several good wins in the six months to 31 March 2004, including a three-year, US$3.8 million contract to provide Microsoft licences to all arms of an Australian retailer with more than 8000 users.

The integrator had also signed a two-year, US$2.8 million deal with Victoria's Department of Human Services for network equipment, professional and managed services, a US$2.3 million deal to provide IP networking and telephony to the Australian Television Network, and a deal with a glass and aluminium supplier to provide a US$0.9 million EMC-based SAN and associated managed services for three years.

DiData group is disposing of 25 percent of its South African arm to a Black Economic Empowerment consortium in that nation.


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