IT group Dimension Data plc on Wednesday reported diluted earnings per share of US 3.4 cents for the six months ended March from 2.0 cents a year ago. Basic EPS rose to 3.4 cents from 2.4 cents.

Revenue was up by 22.7 percent to $2.2-billion, while operating profit was up 54.5 percent to $85.0-million. The operating margin increased to 3.9 percent from 3.1 percent.

Gross profit for the period was $462.2-million, up 19.2 percent, reflecting a 0.5 percent improvement in gross margin to 21.3 percent. Product and Services margins were both firmer, while an improved Services to Product mix also contributed, it said.

Overheads were contained in relation to revenue growth, increasing by 14.5 percent to $377.2-million.

Commenting on the results, CEO Brett Dawson said: "We drive growth from three areas: our regions, lines of business, and services. During the period, the Group achieved a successful performance against all three. All regions performed well with revenue growth and improved operating margins in all three. We achieved double-digit growth across all our lines of business with substantial market share gains in Network Integration and Security. Our services growth was strong."

Assessing the group's regional performance, revenues from the Americas, Asia and Middle East & Africa were particularly strong.

The Americas, which incorporates operations in the US, Canada, Mexico and Brazil, grew revenues grew by 24.2 percent and operating profit expanded by 49.7 percent to $8.4-million.

The group's Asian subsidiary, Datacraft, reported a very strong half, with revenues up by 29.8 percent. In Australia, revenues grew by 6.8 percent and operating profit by 26.9 percent to $19.2-million. Europe recorded revenue growth of 11.6 percent and gross margin improved slightly to 20.5 percent, a good result in an environment of ongoing industry consolidation, currency strength and some weakness in the financial services sector.

Middle East and Africa's revenues grew by 19.9 percent to $456.3-million, and operating profit expanded to $40.4-million at a margin of 8.9 percent.

All four key components of the business – Dimension Data, Plessey, Internet Solutions and Merchants – performed well, it said.

Dimension Data's lines of business strategy also gained momentum during the period. The Network Integration line of business grew by 16.6 percent, extending the very strong performance reported last year and retaining the group's global leadership in the plan, build, support and management of networks. The other global lines of business grew strongly with the Security line of business having an excellent half, growing by 35.6 percent.

Services growth of 17.8 percent reflected strong performances in all regions. Growth in Managed and Professional Services of 18.4 percent and 17.0 percent respectively was supported by good performances from the regional services business, and Internet Solutions. Managed Services growth was particularly strong in Africa, Asia and Australia and reflected the ongoing strength of the Dimension Data offering in the market place.

Professional Services growth across the board was coupled with a strong improvement in gross margin, the result of a focused effort to improve process and efficiencies in the delivery of professional services engagements.

Looking ahead, Dawson is optimistic about both the outlook for the second half of the year and the group's longer-term prospects.

"Building on our strong progress in H1, the key drivers for our business growth are in place. While recognising the recent turmoil in financial services, we are optimistic about the remainder of the financial year. We believe the economic slowdown in several major markets is having some impact on IT spending."

"However, Dimension Data is in a strong strategic and operational position, with the benefit of a robust balance sheet. Our strategy remains clear and unchanged and we continuously review our operational plans to adapt to developing circumstances. We continue to see solid demand in the market for our industry relevant solutions and service offerings and remain confident that the Group is well positioned to drive continued profitable growth," he concluded.

I-Net Bridge