DTC
DTC
DTC - Datatec Limited - Strong Financial Performance And Significant
Improvement In Operating Cash Flow
Datatec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
Strong financial performance and significant improvement in operating cash flow
Datatec ("Datatec" or the "Group", JSE and LSE: DTC), the international
Information and Communications Technology (ICT) group, has today published its
unaudited results for the six months ended 31 August 2008.
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2008
Financial highlights
Revenue: $2,3 billion up 18% (2007: $1,9 billion)
Underlying* EBITDA: $76 million up 25% (2007: $61 million)
Operating profit: $54,3 million up 12% (2007: $48,5 million)
Underlying* earnings per share: 22,5 US cents up 19% (2007: 18,9 US cents)
Significant increase in cash generation from operations: $66 million (2007: $3
million)
*Excluding goodwill impairment, amortisation of acquired intangible assets,
profit or loss on sale of assets and businesses, fair value movements on
put/call arrangements and unrealised foreign exchange movements
Operational highlights
Diversity of Group and significant international scale has helped deliver
continued growth
Over 40% of EBITDA now derived from integration, services and consulting
business streams
Promon acquisition in Brazil improves Group`s geographic mix
Very strong performance from Logicalis in all regions
National presence established in India
Commentary
Jens Montanana, Chief Executive of Datatec, commented:
"Despite deteriorating macro-economic conditions, the Group has delivered a
strong first half performance with further improvements in revenues,
profitability and cash flow.
Our geographic diversity, global presence and improving mix of business are
helping to mitigate the impact of the current economic climate. In all areas of
our business and in each of our divisions we have been able to mitigate slower
growth in some markets with faster growth in others. Emerging and developing
markets have proved resilient with higher contributions from South America, the
Middle East and Asia-Pac.
We are particularly pleased with the financial performance of Logicalis, where
all regions contributed with increases in profits and margins. The strategically
important acquisition of Promon in South America earlier this year, and the pre-
emptive action taken last year to restructure the US operations, have been major
factors in Logicalis` notable performance over this period.
The Group has become more weighted to the cash generative businesses of
integration services and consulting activities which now account for over 40% of
the Group EBITDA. This change, together with tight cash management across the
group has resulted in a substantial improvement in operational cash flow during
the first half of the year.
The Board currently expects that the second half earnings per share, headline
earnings per share and underlying earnings per share will be similar to or
exceed that of the first half."
Profile and group structure
Datatec Group is an international Information Communications Technology ("ICT")
networking and related services business with operations in many of the world`s
leading economies. The Group`s main lines of business comprise: the global
distribution of advanced networking and communications convergence products
("Westcon"); ICT infrastructure solutions and services ("Logicalis"); and
telecommunications strategy consulting ("Analysys Mason"). "Other Holdings"
encompasses the Group`s distribution and ICT services businesses in the Middle
East and Africa as well as the Head Office.
Overview
Datatec has reported a continued strong overall performance in a challenging
environment with good progress made on the execution of key operating
objectives. The Group`s geographic diversity, global presence and improving mix
of business is helping to mitigate the impact of the current economic climate.
Organic revenue growth was 9%, gross margins expanded to 13,4% with underlying*
operating profits up 19% and underlying* earnings per share up 19%. Notably, a
combination of the strong overall performance, improved business mix and
enhanced operational execution across all parts of the business resulted in a
substantial improvement in operating cash flow, with the Group generating $66
million (2007: $3 million).
The initiatives taken to improve the Group`s balance of revenues and profit
streams has resulted in integration solutions, services and consulting
activities now accounting for 46% of the gross margin and 43% of EBITDA. In all
of the Group`s divisions, slower growth in some markets was mitigated by faster
growth in others.
Despite Westcon revenues increasing, operating margins were down as a result of
an investment in building the footprint of value added distribution businesses
in Europe following the acquisitions of Crane and NOXS during the previous
financial year. Trading conditions in the US and Europe remain challenging. As a
result further reductions to the operating cost base are being made so that the
business is sized appropriately for market conditions and to protect
profitability.
There was a significant improvement in the financial performance of Logicalis,
where all regions contributed increases in profits and margins. The pre-emptive
steps taken last year to restructure the US operation is one of the key reasons
the business has continued to perform so strongly this year.
Emerging and developing markets have proved resilient. In particular Brazil,
Turkey, the Middle East and India are expected to continue to show strong growth
in the second half.
Strategy
The Group continues to make good progress with its strategy to deliver long
term, sustainable, above average returns to shareholders by focussing on a
combination of organic growth in the faster growing sectors of the ICT market,
geographical expansion and earnings enhancing acquisitions.
The Group has successfully reduced its dependency on any key market, territory
or technology sector as well as improving supplier and customer diversification
as a consequence of its scale and increasing globalisation.
The Group completed the strategically significant acquisition of Promon
Tecnologia ("Promon"), a leading Brazilian network integration business, during
the first six months of the year. On 11 September 2008 Datatec acquired a 50,01%
stake in Inflow Technologies Private Limited ("Inflow"), an Indian ICT
distribution business. Datatec will continue to look for acquisitions that can
deliver enhanced margins over the longer term and other initiatives to improve
the Group`s returns and facilitate consolidation in proven markets. The Board
believes that with the difficult market conditions, further opportunities may
present themselves as Datatec will be able to exploit its resilient performance,
strong cash flow and balance sheet strength.
A common theme of Datatec`s acquisitions is the active ongoing participation of
the local management of the acquired companies, through empowering these
individuals and ensuring that their interests are aligned to the Group`s. This
allows Datatec to scale its businesses rapidly without adding substantially to
head office costs.
The Group`s increasing scale and international reach is attracting significant
vendor and customer interest as Datatec continues to broaden its solutions and
services offerings, as well as offering a greater exposure to key higher growth
emerging markets and developing economies.
Datatec will continue to target faster growth emerging markets and developing
countries which offer superior growth characteristics and often lower cost of
entry compared to more mature markets.
Financial results
Group revenue increased by 18% (9% organic) to $2,3 billion (2007: $1,9
billion), while gross margin increased from 12,9% to 13,4%.
Of the Group`s $2,3 billion revenue, 35% was generated from North America, 42%
from Europe, 6% from Asia Pacific, 9% from South America and 8% from Middle East
and Africa.
Gross profit increased by 22% from $247,8 million to $303,4 million, while
operating costs increased 22% from $186,8 million to $227,2 million, mainly as a
result of the Promon acquisition.
An analysis of revenue and gross profit contribution across the Group`s
principal business streams is provided below.
Analysis by business
stream ($`m) 2009 - H1 Revenue % Gross Profit %
Distribution 1,650 73 165 54
ICT Solutions 471 21 90 30
Consulting & Professional 145 6 48 16
Services
2,266 303
Underlying* EBITDA, which excludes goodwill impairment, amortisation of acquired
intangible assets, profit or loss on sale of assets and businesses, fair value
movements on put/call arrangements and unrealised foreign exchange movements
increased 25% to $76,2 million (2007: $61,0 million). Reported EBITDA increased
18% to $71,4 million (2007: $60,5 million). The Group had unrealised foreign
exchange losses of $4,8 million (2007: $0,5 million) and realised foreign
exchange gains during the period of $5,2 million (2007: $1,2 million).
Underlying* operating profit increased by 27% to $67,9 million (2007: $53,5
million). Reported operating profit increased by 12% to $54,3 million (2007:
$48,5 million). The net interest charge in the period was $7,4 million (2007:
$8,0 million), down slightly from the same period last year.
Underlying* profit before tax increased by 34% to $60,8 million (2007: $45,5
million). Reported profit before tax was up 17% to $47,2 million (2007: $40,5
million).
The Group`s effective tax rate increased to 32% from 30% in 2007, due to profits
arising in higher taxing jurisdictions.
Underlying* earnings per share rose 19% to 22,5 US cents (2007: 18,9 US cents),
while Headline Earnings per Share ("HEPS") increased by 5% to 17,6 US cents
(2007: 16,8 US cents).
The Group issued 6,8 million new shares during the period. 6,7 million shares
were issued in May 2008 as part of the Promon acquisition, and 0,1 million
shares were issued for exercised share options. In the six months to August 2008
the Group continued with its share-buy back initiative and repurchased 1,2
million shares at a cost of $4,0 million.
Working capital remained tightly controlled. Receivables increased 20% over the
year, inventory increased by 38% and payables and provisions increased by 33%.
Outstanding liabilities to vendors of businesses acquired have increased since
last year end from $2,0 million to a total of $78,9 million, of which $62,2
million is included under long term liabilities. The largest portion of the
increase relates to two elements of the Promon acquisition - potential further
cash payments ($28,2 million) to the sellers based on future profitability and
the performance of the Datatec share price, as well as a liability of $44,6
million recognised against equity in accordance with IAS 32 Financial
Instruments: Presentation, for a put option held by minority shareholders.
Cash generated from operating activities (after working capital changes)
improved significantly to $66,3 million (2007: $2,7 million).
The Group paid $20,5 million (2007: $16,8 million) to shareholders as a capital
distribution in July 2008. The Group ended the period with net debt of $47,7
million, including long and short-term debt (29 February 2008: $31,9 million).
The Group spent approximately $49,5 million on acquisitions (net of cash
acquired) - predominantly Promon - which has improved the Group`s geographical
reach, market position and product mix particularly in Latin America
Divisional reviews
Westcon
Westcon accounted for 67% of the Group`s revenues and 55% of EBITDA (2007: 72%
and 78% respectively).
Westcon is the world`s leading specialty distributor in networking, security,
mobility and convergence for leading technology vendors, including Cisco,
Nortel, Avaya, Juniper and Polycom. Westcon`s revenue increased 9% from
$1,4 billion to $1,5 billion, with increases in Europe and Asia Pacific
contrasting with a decrease in the Americas, as a result of a slowdown in US
sales.
Gross margins increased from 9,8% to 10,1% with gross profit increasing 11% from
$136,4 million to $151,9 million. The increase is attributable to increased
gross margins in the Americas and Asia Pacific. The growth of Cisco business in
the higher margin Brazil market offset competitive pricing pressures, which have
reduced margins in the US. European margins were consistent with the prior
comparable period as it also faces competitive pricing pressures.
Operating expenses in Europe increased as a result of the acquisitions in the
prior year period. Freight costs also increased which have been impacted by
surcharges due to the rise in oil prices.
EBITDA decreased 7% from $47,7 million to $44,1 million with decreases in the
Americas and Europe contrasted with growth in Asia Pacific. Overall EBITDA
margins decreased 50 basis points to 2,9% as lower margins in the US and Europe
offset improved margins in Asia Pacific.
During the first half, Westcon generated cash flow from operations (after
working capital changes) of $11 million. It used $5,2 million for investing
activities, primarily capital expenditures while $15 million was used to repay
credit lines and debt.
Operating profit was $36,9 million (2007: $41,2 million).
Cisco products made up 55% (2007: 57%) of Westcon`s revenue, 10% Nortel (2007:
11%), 10% Avaya (2007: 10%), 15% security solutions (2007: 12%) and 10% other
developing vendors (2007: 10%). 49% of Westcon`s revenue was generated in Europe
followed by 41% in the Americas and 10% in Asia-Pacific.
Companies are seeking efficiency in their networks as well as productivity-
enhancing applications. Need for effective IT security remains paramount as
companies begin to rely increasingly on mobile applications. This continues to
underpin demand for communications technologies and VoIP and networked security
products in particular.
Logicalis
Logicalis accounted for 24% of the Group`s revenues and 40% of EBITDA (2007: 20%
and 13% respectively).
Logicalis is an international provider of integrated ICT solutions, delivering
secure, converged computing and communications infrastructure and services.
Specialising in the areas of advanced technologies, the group`s integrated
services portfolio comprises the architecture, deployment, integration and
management of customers` networks and systems to deliver optimum solutions that
meet their business needs now and into the future.
Revenue increased by 39% to $550,7 million (2007: $395,5 million), including
$106 million contribution from acquisitions. Excluding the impact of
acquisitions made in 2007 and 2008 organic revenue increased by 11%.
On 2 May 2008 Logicalis completed the acquisition of 70% of Promon for a maximum
consideration of $77,2 million in cash and new Datatec shares, plus 30% of
Logicalis` existing operations in Latin America. Goodwill and intangible assets
recognised were $71,8 million and $37,6 million respectively.
In the first six months of the financial year, the performance in the US, Europe
and Latin America has been strong. The US business continued its recovery from a
difficult first half last year, the UK delivered solid growth and the
acquisition in Brazil generated significant revenues and EBITDA in the first
four months of ownership.
Revenue from product sales was up 42% year on year (10% excluding the benefit of
the Brazil acquisition) with growth mainly in Cisco products. Sales of HP and
IBM products were similar to the prior period. The focus on growing annuity
revenues yielded excellent results with maintenance and managed services growing
36%.
The gross margin percentage for the six month period was 22,0% (2007: 21,6%)
with improved product and services margins. The gross profit increased 42% on
the prior year to $121,3 million (2007: $85,3 million).
Operating expenses increased by 16%, significantly lower than the 39% growth in
revenues with the effective management of operating costs. EBITDA rose to $32,0
million (2007: $8,1 million), an increase of 295%.
Operating profit was $23,2 million (2007: $3,3 million).
Analysys Mason
Analysys Mason accounted for 1% of the Group`s revenues and 3% of EBITDA (2007:
2% and 5% respectively).
Analysys Mason provides strategic and technical consulting to many of the
industry`s leading service providers, regulators and government bodies.
Convergence in telecommunications, broadcasting, television and online media
content is being fuelled by widespread deployment of faster broadband internet
infrastructure. Analysys Mason is particularly well positioned to exploit demand
for advisory and consulting services in this market around the world.
On a local currency basis revenues fell by 2%, but the strengthening of the US
Dollar accentuated this fall resulting in revenues of $30,4 million (2007: $31,4
million).
Analysys Mason has felt the impact of the general economic uncertainty as
discretionary spending with large enterprises has tightened. Steps have been
taken to reduce the fixed cost base in the business to mitigate the risk of this
uncertainty. As a result of lower than expected levels of consulting
utilisation, gross margin fell to 36.8% (2007: 39.2%) resulting in EBITDA of
$2,4 million (2007: $3,0 million) at a margin of 7.9% (2007: 9.6%) and operating
profit to $1,9 million (2007: $2,7 million).
On 26 June 2008 Analysys Mason completed the acquisition of OSS Observer. This
acquisition, based in the US, will strengthen the research business, increasing
the breadth of service that Analysys Mason delivers to its global client base.
The business will be fully integrated into the Analysys Mason research business.
Africa and Middle East (included in "Other Holdings")
Datatec`s Africa and Middle East operations made up 8% of the Group`s revenue
and 2% of EBITDA.
Included in Other Holdings are the operating costs of the Datatec head office
entities which also include unrealised and realised foreign exchange losses of
$1,4 million and $1,4 million respectively, (2007: unrealised loss of $0,5
million and realised gain of $1,5 million).
Westcon Africa Middle East (Pty) Ltd ("WAME") is the distribution holding
company for Datatec`s 55% stake in Westcon SA and its 51% stake in Westcon
Africa. These combined operations span 12 sub-saharan African countries. Westcon
SA revenues improved to $42,5 million (2007: $38,6 million), with EBITDA
increasing to $1,6 million (2007: 1,5 million), and the EBITDA margin increased
from 3,5% to 4,0%. Westcon Africa`s performance is reported for an eight month
period due to a change in year end to align with the Group. Revenues were $62,4
million. Westcon Africa posted an EBITDA loss of $3,1 million due mainly to
tougher than expected trading conditions in Kenya as a consequence of the
political uncertainty that existed after elections earlier in the year as well
as investments in organic start up initiatives and provisions made following the
acquisitions of Sparnoon Dynatech and Jet Distribution.
Westcon Middle East group, Datatec`s value-added distributor for data networking
products and services, covering the Middle East, Western Asia and North Africa,
revenues increased by 27% to $33,8 million (2007: $26,7 million) while EBITDA
increased by 6% to $1,5 million. Comstor Middle East ("Comstor"), Westcon`s
Cisco business in the Middle East, started operations in February 2007. Comstor
revenues increased by 180% to $12,0 million, and it achieved EBITDA of $ 0,3
million (2007: Loss of $0,3 million).
African Legend Indigo is Datatec`s 55% owned South African operation formed in
partnership with African Legend Technologies as part of South Africa`s Black
Economic Empowerment programme. This business generated revenue of $25,0 million
(2007: $27,1 million) and EBITDA of $0,7 million (2007: loss of $0,2 million).
The distribution businesses currently included in the Africa and Middle East sub
grouping operate in some of the most dynamic and fast growing markets in the
world today. In addition, the acquisition of Inflow in India will also form part
of this sub group. The scale and diversity of these operations requires a more
focused and structured management approach in order to maximise the underlying
benefits and cross-group opportunities. As a result, these operations are being
consolidated under a new `Westcon Emerging Markets` umbrella, which will ensure
a more regional approach towards management and reporting, with a strong focus
on existing business development and cross-group operational efficiencies. The
new structure and reporting will be effective by the end of the financial year.
Reporting
This report complies with International Accounting Standard 34 - Interim
Financial Reporting as well as with Schedule 4 of the South African Companies
Act, the AIM Rules and the disclosure requirements of the JSE Limited`s Listings
Requirements.
The accounting policies comply with International Financial Reporting Standards
("IFRS") of the International Accounting Standards Board and are consistent with
those applied in the prior year financial statements. This report has not been
audited and the forecast within the current trading and prospects section below
has not been reviewed and reported on by Datatec`s auditors.
Subsequent events
On 11 September 2008 Datatec acquired a 50,01% stake in Inflow. The remaining
49,99% will continue to be held by management and other existing shareholders.
The acquisition of a 50,01% stake in Inflow, with its presence in nine key
Indian cities, provides Datatec with an excellent entry point and initial
footprint in India. Inflow also has operations in Sri Lanka and Singapore.
Current trading and prospects
Market conditions remain challenging and the outlook uncertain. The
deterioration of the international trading environment and the global financial
crisis is having an impact on many economies in which Datatec operates. At this
stage it is unclear how much this may affect the IT and telecommunications
markets around the world as communications technologies are often leveraged in
periods of slower economic growth as a means of improving productivity and
operating efficiencies.
As a key international intermediary for these technologies, the Group remains
well positioned. However, in the current market environment management remains
focused on controlling operating expenses, improving its cash position and
diversifying its operations globally, particularly in the faster developing
economies.
The Board currently expects that the second half earnings per share, HEPS and
underlying earnings per share will be similar to or exceed that of the first
half.
On behalf of the Board
S J Davidson J P Montanana I P Dittrich
Chairman Chief Executive Officer Chief Financial Officer
15 October 2008
www.datatec.co.za
Condensed group income statement
Unaudited Unaudited Audited
six months six months year
to to ended
US$ 000`s 31 Aug 08 31 Aug 07 29 Feb 08
Revenue 2 265 970 1 921 704 4 007 932
Continuing operations 2 159 870 1 776 978 3 623 024
Acquisitions# 106 100 144 726 384 908
Cost of sales (1 962 550) (1 673 876) (3 460 802)
Gross profit 303 420 247 828 547 130
Operating costs (227 175) (186 842) (401 750)
Unrealised foreign (4 841) (536) 5 315
exchange (losses)/gains
Operating profit before
finance costs,
depreciation
and amortisation 71 404 60 450 150 695
("EBITDA")
Depreciation (8 305) (7 470) (16 460)
Amortisation related to (8 808) (4 460) (10 345)
acquired intangible
assets
Operating profit before 54 291 48 520 123 890
goodwill adjustment
Goodwill adjustment - - (421)
Operating profit 54 291 48 520 123 469
Interest received 4 052 5 311 11 533
Financing costs (11 443) (13 360) (26 841)
Share of equity- 275 - 121
accounted investment
earnings
Profit before taxation 47 175 40 471 108 282
Taxation (15 102) (12 122) (28 246)
Profit for the period 32 073 28 349 80 036
Attributable to:
Minority interests 1 661 905 4 382
Equity holders of the 30 412 27 444 75 654
parent
32 073 28 349 80 036
Number of shares
(millions)
Issued 175 169 169
Weighted average 173 163 166
Diluted weighted average 175 166 170
Earnings per share (US
cents)
Basic EPS 17,6 16,8 45,4
Diluted basic EPS 17,4 16,5 44,6
SALIENT FINANCIAL
FEATURES
Headline earnings 30 411 27 368 75 910
Headline earnings per
share (US cents)
Headline 17,6 16,8 45,6
Diluted headline 17,4 16,5 44,7
Underlying earnings 38 999 30 857 78 796
Underlying earnings per
share (US cents)
Underlying 22,5 18,9 47,3
Diluted underlying 22,3 18,6 46,4
Net asset value per 361,7 362,2 386,9
share (US cents)
Cash-generation per 38,0 1,6 52,7
share (US cents)
KEY RATIOS
Gross margin (%) 13,4 12,9 13,7
EBITDA on ongoing 3,2 3,1 3,8
operations (%)
Effective tax rate (%) 32,0 30,0 26,1
Exchange rates
Average Rand/US$ 7,7:1 7,1:1 7,1:1
exchange rate
Closing Rand/US$ 7,7:1 7,2:1 7,7:1
exchange rate
#The revenue included from acquisitions in the period to August 2008 was $106
million. Had the acquisition date been 1 March 2008, the pro-forma revenue would
have been approximately $145 million. The profit after tax contributed by these
acquisitions during the period was $7,3 million.
Condensed group balance sheet
Unaudited Unaudited Audited
US$ 000`s 31 Aug 08 31 Aug 07 29 Feb 08
ASSETS
Non-current assets 517 531 372 582 421 074
Property, plant and 33 975 28 506 32 220
equipment
Capitalised development 15 919 13 951 16 638
expenditure
Goodwill 354 465 251 111 284 348
Other intangible assets 82 933 56 406 54 956
Investments 3 796 2 865 3 652
Deferred tax assets 26 443 19 743 29 260
Current assets 1 572 597 1 290 099 1 463 245
Inventories 401 703 290 359 341 036
Receivables 939 775 784 335 877 527
Cash and cash equivalents 231 119 215 405 244 682
Total assets 2 090 128 1 662 681 1 884 319
EQUITY AND LIABILITIES
Ordinary shareholders` 632 373 612 359 654 707
funds
Minorities` interest 54 557 16 104 23 576
Total equity 686 930 628 463 678 283
Long-term liabilities 57 789 59 537 58 760
Amounts owing to vendors 62 231 - -
Deferred tax liabilities 37 258 7 064 24 498
Current liabilities 1 245 920 967 617 1 122 778
Payables and provisions 1 009 654 758 792 893 880
Amounts owing to vendors 16 631 3 294 2 000
Taxation 10 792 12 712 16 395
Bank overdrafts 208 843 192 819 210 503
Total equity and 2 090 128 1 662 681 1 884 319
liabilities
Capital expenditure 10 053 7 477 18 502
incurred in current
period
Capital commitments at 11 194 4 651 11 283
end of period
Lease commitments at end 110 695 112 644 116 686
of period
Payable within one year 19 364 21 614 20 320
Payable after one year 91 331 91 030 96 366
Condensed group cash flow statement
Unaudited Unaudited Audited
six months six months year
to to ended
US$ 000`s 31 Aug 08 31 Aug 07 29 Feb 08
EBITDA 71 404 60 450 150 815
Profit on disposal of (1) (106) (80)
property, plant and
equipment
Non-cash items (4 486) 658 12 015
Cash generated before 66 917 61 002 162 750
working capital changes
Working capital changes (569) (58 257) (85 335)
(Increase)/decrease in (56 643) 7 954 (65 598)
inventories
Increase in receivables (57 746) (2 034) (88 049)
Increase/(decrease) in 113 820 (64 177) 68 312
payables
Cash generated from 66 348 2 745 77 415
operations
Net finance costs paid (7 391) (8 049) (15 308)
Taxation paid (19 418) (16 580) (29 809)
Net cash inflow/(outflow) 39 539 (21 884) 32 298
from operating activities
Net cash outflow from (49 496) (153 847) (180 744)
investing in subsidiaries
Net cash outflow from (7 843) (7 068) (27 640)
other investing activities
Net cash inflow from 20 860 76 124 70 574
financing activities
Capital distribution to (20 485) (16 775) (16 775)
shareholders
Decrease in cash and cash (17 425) (123 450) (122 287)
equivalents
Translation difference on 5 522 4 645 15 074
opening cash position
Cash and cash equivalents 34 179 141 392 141 392
at beginning of period
Cash and cash equivalents 22 276 22 587 34 179
at end of period(+)
(+)Comprises cash resources, net of bank overdrafts and trade finance advances.
Segmental analysis
Unaudited Unaudited Audited
six months six months year
to to ended
US$ 000`s 31 Aug 08 31 Aug 07 29 Feb 08
Revenue
Westcon 1 509 645 1 385 224 2 853 636
Logicalis 550 650 395 505 845 112
Analysys Mason 30 405 31 451 63 476
Other holdings 175 270 109 524 245 708
2 265 970 1 921 704 4 007 932
EBITDA
Westcon 44 146 47 660 101 835
Logicalis 32 030 8 117 36 195
Analysys Mason 2 350 3 027 6 944
Other holdings (7 122) 1 646 5 721
71 404 60 450 150 695
Operating profit before
goodwill adjustment
Westcon 36 852 41 207 86 468
Logicalis 23 237 3 284 26 141
Analysys Mason 1 923 2 719 6 240
Other holdings (7 721) 1 310 5 041
54 291 48 520 123 890
Total assets
Westcon 1 285 091 1 133 779 1 270 967
Logicalis 608 556 343 990 391 979
Analysys Mason 52 543 51 809 55 594
Other holdings 143 938 133 103 165 779
2 090 128 1 662 681 1 884 319
Determination of headline earnings
Unaudited Unaudited Audited
six months six months year
to to ended
US$ 000`s 31 Aug 08 31 Aug 07 29 Feb 08
Attributable to equity
holders of the parent
per the income statement 30 412 27 444 75 654
Headline earnings (1) (106) 234
adjustments
Goodwill adjustments - - 314
Profit on disposal of plant (1) (106) (80)
and equipment
Tax effect - 32 24
Minorities` interest - (2) (2)
Headline earnings 30 411 27 368 75 910
Determination of underlying
earnings
Headline earnings 30 411 27 368 75 910
Underlying earnings 13 649 4 996 5 030
adjustments
Unrealised foreign exchange 4 841 536 (5 315)
losses/(gains)
Amortisation of acquired 8 808 4 460 10 345
intangible assets
Tax effect (2 821) (1 502) (3 074)
Minorities` interest (2 240) (5) 930
Underlying earnings 38 999 30 857 78 796
Condensed statement of changes in total equity
Unaudited Unaudited Audited
six months six months year
to to ended
US$ 000`s 31 Aug 08 31 Aug 07 29 Feb 08
Balance at beginning of 678 283 552 596 552 596
period
Translation of foreign (3 980) (551) (4 934)
subsidiaries
Translation difference on (2 293) 1 481 2 236
equity loans
Put option fair value (49 302) - -
Prior year adjustment - 1 132 -
Recognised directly in (55 575) 2 062 (2 698)
equity
Attributable profit for 30 412 27 444 75 654
period
Total income recognised for (25 163) 29 506 72 956
the period
Shares issued 26 540 61 225 64 605
Capital distribution to (20 485) (16 775) (16 775)
shareholders
Share buy-back (4 014) - (6 131)
Share-based payments 780 659 2 308
Minority interests 30 989 1 252 8 724
Balance at end of period 686 930 628 463 678 283
Directors
SJ Davidson*# (Chairman), JP Montanana# (CEO), IP Dittrich (Chief Financial
Officer), JF McCartney+*, LW Nkuhlu*, CML Savage*, CS Seabrooke*, NJ Temple*#
#British *Non-executive +American
Date: 15/10/2008 08:00:07 Produced by the JSE SENS Department.
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