DTC
DTC
Datatec - Issue Of Pathfinder Admission Document For Proposed
Aim Listing In London
DATATEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
("Datatec" or "the Group")
ISSUE OF PATHFINDER ADMISSION DOCUMENT FOR PROPOSED AIM LISTING IN
LONDON
Datatec, the international Information & Communications Technology (ICT)
group, currently capitalised at R4.4 billion (approximately $560
million) on the JSE Limited (`JSE"), today issues a pathfinder admission
document for its AIM listing in London.
Datatec is registered in South Africa and listed on the JSE in 1994.
With operations in more than 20 countries, more than 98% of the Group"s
revenue is generated outside South Africa, mostly in the US and UK. The
Group is domiciled in South Africa.
In the year ended 28 February 2006, the Group reported an 18% increase
in revenues from ongoing activities to $2.98 billion (2005: $2.52
billion), EBITDA increased to $85.2 million (2005: $28.4 million),
operating profit increased to $69.0 million (2005: $10.9 million) and
headline earnings per share to 26.92 cents (2005: 3.59 cents).
Placing details
- The Group is proposing to issue up to 16,353,537 new shares,
representing up to 10% of its issued share capital (as enlarged by
such issue), to institutional investors by way of a placing to
raise up to approximately GBP29 million (approximately $55
million). Indications of interest have been confirmed for $10
million from cornerstone investors.
- The new shares will be priced at a maximum discount of up to 10% to
the 30 day volume weighted average share price (VWAP) on the JSE
immediately prior to the date of determination of the issue price
of the new shares
Dresdner Kleinwort is advising Datatec on its proposed listing on AIM
and Metier is advising Datatec on the South African aspects of the
transaction.
The issue of new shares is subject to the approval of the Company"s
shareholders at a general meeting to be held on 16 October 2006.
Key strengths of the business
Datatec is an industry intermediary focussed on the supply of advanced
ICT products and services into the higher growth segments of the global
ICT market. It operates at three key points in the ICT supply chain,
through three principal operating divisions. Datatec has a number of
key strengths that provide it with a competitive advantage. These
include:
Datatec operates three focussed ICT supply chain businesses which gives it
multiple points of access to the growing ICT market as well as a reduced risk
profile in the event of a market downturn.
The Group has a broad international presence, with operations in over 20
countries. Of the Group"s $3 billion revenue generated in FY06, more than
50% was generated from North America, 36% from the UK and Europe and 6% from
Asia Pacific.
The Group is principally focussed on providing a higher value offering to mid-
market and large enterprise customers (both commercial and public sector),
which the Directors believe represents the most attractive target market for
the Group"s businesses. The Group provides networking, security and
convergence products and services and the growth rates for such products have
been, and are expected by the Directors to continue to be, significantly
higher than for the general ICT market.
The Group has long established, strategic relationships with all of the
leading product vendors, such as Cisco, Nortel, Avaya, IBM, HP, Nokia and
Checkpoint, and is a key partner for most of these vendors in each of the
Group"s key geographic markets.
One of the key elements of the Group"s success has been the development of
new business lines and geographical markets, in order to broaden the Group"s
portfolio of business activities and to maintain the Group"s focus on higher
growth and higher margin activities.
Datatec has demonstrated a successful track record of organic and acquisition-
led growth. The Group has grown revenues by 44% and has completed seven
acquisitions over the period from FY04 to FY06, all of which have been
successfully integrated into the operating businesses.
Datatec has delivered improved financial performance and productivity since
the ICT market downturn. Revenue and gross profit by employee increased by
24% and 20% respectively, from the start of FY04 to FY06. The Group has also
made significant improvements in its working capital management over the last
three years, with net working capital remaining at approximately $197 million
at the FY06 year end (FY04: $194 million) despite a 27% increase in revenues
since FY04.
The Group has a strong operational management team, with considerable
experience in the international ICT industry and a track record of delivering
organic and acquisition-led growth.
Strategy
The Group"s strategy is to deliver long-term, sustainable, above average
returns to shareholders through the development of its three principal
operating divisions. The Group acts as a value-added intermediary, operating
at three key points in the ICT supply chain. These divisions are run as pure-
play standalone businesses which, the Directors believe, enables them to
deliver enhanced operational and financial performance as well as to react
faster to technology change.
The key elements of the Group"s strategy include continued focus on the
higher value, faster growing sectors of the ICT market; targeted geographic
expansion; investment in higher margin services activities; and value-
enhancing acquisitions.
Current trading
As announced on 2 October 2006, Trading for the first half of the year has
been in line with management"s expectations, with the Group delivering a good
performance in terms of overall revenues and margins.
Jens Montanana, Chief Executive of Datatec, comments:
"We are excited at the prospect of a listing in London where we will be one
of the larger technology-sector stocks. The issue of the pathfinder
admission document today is the next step in the process.
"A London listing will give us greater access to capital to support our
strategy of organic growth and targeted acquisitions.
"With our three independent business streams, sector and geographic
diversity, and a leading vendor portfolio, we are well positioned for further
expansion driven by the high growth of networking, security and convergence
technologies."
Information on the Group from the pathfinder admission document is included
below.
Enquiries:
Datatec Limited
(www.datatec.co.za)
Jens Montanana, Group Chief + 44 (0) 1753 797 118
Executive
David Pfaff, Group Finance + 44 (0) 1753 797 118
Director
Wilna de Villiers, Group +27 (0) 11 233 1013
Marketing Manager
Dresdner Kleinwort
Paul van Issum, Equity Capital + 44 (0) 20 7623 8000
Markets
Simon Russell/James Rudd, Global
Banking
Metier
Paul Botha/ Greg von Holdt, + 27 (0) 11 268 4000
Metier Advisory
College Hill (UK press)
Adrian Duffield/Corinna Dorward + 44 (0) 20 7457 2020
Fleishman-Hillard (SA press)
Michelle de Pons/Lucien Vallun + 27 (0) 11 548 2000
This announcement is not for publication, release or distribution, directly
or indirectly, in or into the United States of America, Canada, Australia,
the Republic of Ireland, or Japan, or their respective territories or
possessions.
The contents of this announcement, which has been issued by the Company and
is the sole responsibility of the Company, have been approved by Dresdner
Kleinwort Limited solely for the purposes of section 21 of the Financial
Services and Markets Act 2000 ("FSMA"). Dresdner Kleinwort Limited, which is
authorised and regulated by the Financial Services Authority, is acting for
the Company and for no-one else, in connection with the contents of this
document and will not be responsible to anyone other than the Company for
providing the protections afforded to customers of Dresdner Kleinwort Limited
or for affording advice in relation to the contents of this announcement or
any matters referred to herein.
This announcement does not constitute or form part of an offer for sale or
subscription of, or any solicitation of an offer to purchase or subscribe
for, securities and any purchase of or subscription or application for shares
in the proposed placing of an as yet undetermined number of ordinary shares
("Placing") should only be made on the basis of information contained in the
admission document to be issued in connection with the Placing. This
announcement does not and the admission document will not constitute and the
Company is not making an offer of transferable securities to the public
within the meaning of sections 85 and 102B of FSMA. The price and value of,
and income from, shares may go down as well as up. Persons needing advice
should consult an independent professional adviser.
The shares to be placed in the Placing have not been, and will not be,
registered under the US Securities Act of 1933 or under the US Securities
Exchange Act of 1934, as amended, or under the securities legislation of any
state of the United States of America, nor under the relevant securities laws
of Canada, Australia, the Republic of Ireland, the Republic of South Africa
or Japan, and may not be offered or sold in or into the United States of
America. There will be no offering or placing of shares in or into the
United States of America, Canada, Australia, the Republic of Ireland, the
Republic of South Africa or Japan or in any country, territory or possession
where to do so may contravene local securities laws or regulations. This
announcement (or any part of it) is not to be reproduced, distributed, passed
on, or the contents otherwise divulged, directly or indirectly, in or into
the United States, Canada, Australia, the Republic of Ireland, or Japan, in
any country, territory or possession where to do so may contravene local
securities laws or regulations.
Information contained in this announcement may include `forward looking
statements". All statements other than statements of historical facts
included herein, including, without limitation, those regarding the Group"s
financial position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating to the
Group"s business) are forward-looking statements.
Such forward-looking statements are based on a number of assumptions
regarding the Group"s present and future business strategies and the
environment in which the Group expects to operate in the future. These
forward-looking statements speak only as to the date of this announcement and
cannot be relied upon as a guide to future performance. The Company expressly
disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained in this announcement to
reflect any changes in its expectations with regard thereto or any change in
events, conditions or circumstances on which any statement is based.
INFORMATION ON THE GROUP
Introduction
The Group is an international ICT business, focussed on the provision of ICT
products and solutions. The Group has operations in North America, Europe,
South America, Africa, the Middle East and the Asia Pacific region and has
approximately 2,500 employees. Whilst the Company is a South African
registered company whose shares are listed on the JSE, the Group generates
more than 98% of its revenue in foreign currencies outside South Africa. In
FY06, the Group generated 53% of its revenue from North America, 36% from
Europe, 6% from the Asia Pacific region, 3% from South Africa and the Middle
East, and 2% from South America.
The Group"s operating divisions act as industry intermediaries, enabling
information technology users to gain access to a broad range of advanced
technologies and professional services, in order to implement secure,
converged computing and communications infrastructures (including wireless,
IP communications, storage and data management, intelligent networking and
security). The Group addresses three key areas in the ICT supply chain:
networking distribution, IT integration solutions and services,
telecommunications and technology consulting. The Group has partnerships with
a portfolio of leading vendors in the ICT industry, including Cisco, IBM, HP,
Nortel, Avaya, Nokia and Checkpoint.
The Group has three principal operating divisions:
Westcon - an international distributor of advanced networking and
communications convergence products from vendors such as Cisco, Nortel,
Avaya, Checkpoint and Nokia operating in the high growth security,
convergence and mobility markets of North and South America, Europe and the
Asia Pacific region. Westcon is headquartered in New York, US with operations
in sixteen countries, and approximately 1,100 employees. Westcon adds value
to its distribution activities by providing resources such as technical
expertise, training, sales support and services. Westcon provides solutions
that include the design and configuration of convergence networks, network
extensions such as video conferencing, network storage and unified messaging
and network security to over 7,900 customers worldwide. These customers
include value-added and general resellers, systems integrators and service
providers that resell networking products and solutions to small and medium
sized businesses, large enterprises and governments. In FY06, Westcon
represented 77% of the Group"s revenue and 78% of the Group"s EBITDA;
Logicalis - an international provider of integrated ICT solutions, delivering
secure, converged computing and communications infrastructure and services
which sources it products from OEMs and distributors. Logicalis is
headquartered in Slough, UK and with operations in nine countries in North
America, South America and Europe and approximately 1,000 employees.
Logicalis provides the architecture, deployment, integration and management
of networks and systems to deliver solutions for customers. These customers
include mid market and large enterprise customers. The Directors believe that
Logicalis is well positioned to continue to play a consolidating role in its
core markets of the US and UK, and elsewhere. In FY06, Logicalis represented
18% of the Group"s revenue and 20% of the Group"s EBITDA; and
Analysys Mason - an ICT consultancy, headquartered in London in the UK, with
operations in seven countries and approximately 250 employees. Analysys
Mason"s activities include strategic telecommunications and networking
consulting, technology consulting and implementation, research, project and
change management and contact centre and customer relationship management.
Analysys Mason"s customers primarily comprise telecommunications operators,
industry regulators, financial institutions, service providers, central and
local governments, educational entities and banking institutions. In FY06,
Analysys Mason represented 2% of the Group"s revenue and 7% of the Group"s
EBITDA.
The Group also has other operations, being Westcon AME (operating in South
Africa), OnLine (operating in the Middle East) and Rangegate (operating in
South Africa) which in aggregate accounted for 3% of the Group"s revenue and
made a loss before interest, tax, depreciation and amortisation of $4.4
million in FY06 (includes Group head office costs). Westcon AME and OnLine
are value-added networking equipment distributors in South Africa and the
Middle East, respectively, whose operations are similar to those of Westcon.
Rangegate operates solely in South Africa and represents the Group"s wireless
mobile technology systems integration business. It provides mobile supply
chain solutions to sectors such as retail, industrial, manufacturing,
transport and logistics.
Strategic and corporate business development, corporate finance, mergers and
acquisition, financial reporting, investor relations and marketing services
are provided by the Group"s corporate headquarters in South Africa. Each of
the Group"s operating divisions are run as standalone businesses reporting to
the Group"s head office.
Strategy
The Group"s strategy is to deliver long-term, sustainable, above average
returns to shareholders through the development of its three principal
operating divisions. The Group acts as a value-added intermediary, operating
at three key points in the ICT supply chain. These divisions are run as pure-
play standalone businesses which, the Directors believe, should enable them
to deliver enhanced operational and financial performance as well as to react
faster to technology change. Against this background, the key elements of the
Group"s strategy are as follows:
Continued focus on the higher value, faster growing sectors of the ICT market
The Group will continue to be focussed on higher growth and higher margin ICT
products and services, including the early adoption of new, emerging
technologies where the Group"s operating businesses can provide added value
to customers in distribution, systems integration and consulting. The Group
is well positioned to take advantage of advances in networking, security and
convergence technologies (such as VoIP); the growth and consolidation of IT
solutions integration and managed services; and the increasing demand for
professional services and consulting, brought about by regulatory and
enterprise business needs for expertise by customers.
Targeted geographic expansion
Whilst the Group is already a large international business, the Directors
intend to leverage further the Group"s position as a value-added intermediary
by extending the successful business model of each of its principal operating
divisions into specifically targeted geographic markets. The principal
geographies that will be targeted are the US, the UK, the major markets of
continental Europe and selected emerging markets.
Investment in higher margin services activities
In FY06, over $178 million of the Group"s revenues were derived from services
representing approximately 6% of the Group"s revenues. However, at a gross
margin level, the contribution was approximately 17%, or over $57 million, of
the Group"s gross profits in FY06. The Group intends to broaden its services
offerings and grow the overall proportion of gross margin and operating
profit derived from services in Logicalis and Analysys Mason. The substantial
product sales component of the Group will continue to fund and act as a
catalyst for the development of services activities by Logicalis, as the
major vendors increasingly rely on channels to deliver higher value solutions
and services, particularly in the early adoption stage of advanced
technologies and the deployment of complex solutions.
Value-enhancing acquisitions
Organic growth will be supplemented by strategic acquisitions across all
three of the Group"s operating divisions. The Group will continue to adopt a
disciplined approach to its acquisition policy, applying the requisite due
diligence to ensure that acquisitions are both value enhancing and capable of
being integrated effectively. In addition to extending the Group"s geographic
reach, where appropriate, the Group will also consider acquisitions that
allow it to grow market share, increase exposure to certain technology
sectors and broaden its service offering.
Key strengths
The Directors believe that the Group has a number of key strengths that
provide it with a competitive advantage. These key strengths include the
following:
Three focussed ICT supply chain businesses
The Group operates three focussed ICT supply chain businesses, being: value
added distribution of networking, security and convergence technologies
(through Westcon), ICT integrated solutions and secure converged computing
and communications and infrastructure and services (through Logicalis) and
ICT Consulting (through Analysys Mason). These businesses give the Group
multiple points of access to the growing ICT market as well as a reduced risk
profile in the event of a market downturn. In addition, the Group services
over 13,000 customers worldwide with no single customer accounting for more
than 2% of the Group"s revenue in FY06. The Directors believe that the
standalone, pure-play nature of each operating division also facilitates
enhanced operational and financial performance, as well as the ability to
react faster to technology change. The increasing proportion of Group gross
margin and operating profits derived from higher value products and services
continues to better balance the Group"s activities.
Global scale and reach
The Group has a broad international presence, with operations in over 20
countries. Of the Group"s $3 billion revenue generated in FY06, more than 50%
was generated from North America, 36% from the UK and Europe and 6% from Asia
Pacific. The Group"s strong position in North America and the UK is
complemented by a growing contribution from other markets such as the rest of
Europe, South America and the Asia Pacific region. The Group"s international
presence also strengthens its product and service offerings and in turn its
relationships with vendors and customers in its chosen markets.
Network and enterprise focus
The Group is principally focussed on providing a higher value offering to mid-
market and large enterprise customers (both commercial and public sector),
which the Directors believe represents the most attractive target market for
the Group"s businesses.
The Group provides networking, security and convergence products and services
and does not participate in commoditised, lower margin activities such as the
supply of desktop PCs, printers and consumables. Growth rates for global
networking, security and convergence products and services have been, and are
expected by the Directors to continue to be, significantly higher than for
the general ICT market. This reflects the importance of networking for
corporate and public organisations and technology developments such as the
growth in e-commerce, the convergence of voice, data and video networks and
the convergence of the data centre and network IT environment.
Positioning and relationships with leading vendors
The Group is well-positioned to take advantage of the increasing trend by
vendors to outsource specific elements of the supply chain, such as
distribution, logistics and marketing, to key value added distributors such
as Westcon. These vendors rely on distributors, resellers and system
integrators to address the highly fragmented end-user customer base who
require technical expertise to identify and install complex products and
solutions. The Group has long established, strategic relationships with all
of the leading product vendors, such as Cisco, Nortel, Avaya, IBM, HP, Nokia
and Checkpoint, and is a key partner for most of these vendors in each of the
Group"s key geographic markets. For example, Westcon is one of Cisco"s
largest distributors in the world and Nortel"s largest distributor in the US.
These vendors give the Group access to the leading products in the key
networking, security and convergence markets. As part of these relationships,
the Group actively collaborates with the vendors on sales and marketing
initiatives to develop new market opportunities, which benefits both the
vendors and the Group, as well as providing the Group with earlier access to
new technologies.
Successful development of new business lines and geographical markets
One of the key elements of the Group"s success has been the development of
new business lines and geographical markets, in order to broaden the Group"s
portfolio of business activities and to maintain the Group"s focus on higher
growth and higher margin activities. This has included the Group growing its
business through acquisitions in certain key areas, such as North America and
Europe, in new business activities, such as IBM technologies and services, as
well as developing its operations in new geographies, such as Chile and Peru
and the organic expansion of the Group"s value added services.
Successful track record of organic and acquisition driven growth
The Group has demonstrated a successful track record of organic and
acquisition-led growth. The Group has grown revenues by 44% and has completed
seven acquisitions over the period from FY04 to FY06, all of which have been
successfully integrated into the operating businesses. These acquisitions
have given the Group critical mass with key vendors and increased scale in
key geographic markets, such as IBM and HP in the US and UK, and an
increasing exposure to higher margin services and consultancy activities.
Since the end of FY06, the Group has made a further three acquisitions and
the Directors expect that these businesses will also be successfully
integrated into the operating businesses.
Delivery of improving financial performance and productivity
Following the severe downturn in the ICT market between 2002 and 2004, the
Group delivered an improving financial performance in terms of revenue,
EBITDA, operating profit before goodwill impairment and headline earnings per
share. This improvement is demonstrated by increases in business productivity
such as revenue and gross profit by employee, which increased by 24% and 20%
respectively, from the start of FY04 to FY06. The Group has also made
significant improvements in its working capital management over the last
three years, with net working capital remaining at approximately $197 million
at the FY06 year end (FY04: $194 million) despite a 27% increase in revenue
since FY04.
The Group"s strong balance sheet and operating cash flow generation have
enabled the Group to continue to invest in higher margin activities, such as
professional and managed services and consultancy, whether by investment in
existing businesses or by acquisition.
Strong operational management and skilled workforce
The Group has a strong operational management team, with considerable
experience in the international ICT industry and a track record of delivering
organic and acquisition-led growth. The Directors believe that the skills of
this team and those of the wider workforce are one of the key factors behind
the Group"s successful track record in a very competitive industry.
Westcon (77% of the Group"s revenues and 78% of Group"s EBITDA for FY06)
Activities
Westcon is a leading distributor of networking technology from vendors such
as Cisco, Nortel, Avaya, Checkpoint and Nokia to the security, convergence
and mobility markets in North and South America, Europe and Asia and has
operations in sixteen countries. Westcon has established strategic
partnerships with a number of such vendors in the key markets in which it
operates. Westcon does not develop proprietary hardware or software; rather
it is an industry intermediary that enables information technology users to
gain access to a broad range of advanced technologies in order to implement
secure, converged computing and communications infrastructures (including
wireless, IP communications, storage and data management, intelligent
networking, data management and security). Westcon does not distribute low
margin commoditised products such as PC"s, printers and consumables.
For vendors, Westcon provides an important indirect sales channel, focussed
on selling their technologically advanced products. Westcon"s customers, who
are resellers, systems integrators and service providers that resell
networking products and solutions to small and medium sized businesses, large
enterprises and governments, typically do not have direct relationships with
Westcon"s vendors. Westcon provides customers with the necessary technical
expertise, sales support and services required to resell, install and support
these products. Westcon also provides its customers with solutions that
integrate products manufactured by other vendors, many of whose products are
complementary to those of Westcon"s vendors. Westcon is experienced in
selling products that enable the convergence of voice, data and video
applications and technologies, including VoIP, as well as products that
provide security for networking and communications systems.
Westcon provides its value added service offering to its customers in several
ways. First, since Weston has relationships with many leading vendor
partners, it can create tailored solutions to fit a particular customer"s
needs. This may include adding an application to help a network
infrastructure run more efficiently, or providing a security option for an IP
network. Weston also adds value by offering packaged solutions that cater to
each market it does business in. For example, OneDefense is a dedicated
programme that gives customers a ``one stop shop"" for everything they need
to put together a Cisco-oriented security solution. Similar programmes are in
operation for VoIP.
Westcon generated 54% of its FY06 revenue from North America, 37% from
Europe, 8% from the Asia Pacific region and 1% from South America. A
substantial proportion of Westcon"s historic revenue has been derived from
the sale of Cisco, Nortel, Avaya, Checkpoint and Nokia products, which
accounted for 59%, 11%, 9%, 4% and 3% respectively, of Westcon"s revenue in
FY06. Westcon sells and markets its vendors" products through three branded
divisions, Comstor, Westcon Division and Voda One:
- Comstor (59% of Westcon"s revenue in FY06)-the Comstor division
primarily distributes products manufactured by Cisco in the US, Europe,
Australia and Singapore. In addition, Comstor distributes products
manufactured by other vendors such as RSA Security, Inc.. Comstor has offices
in the US and in nine other countries, including the UK, Germany and
Australia, and serves customers in approximately 45 countries;
- Westcon Division (33% of Westcon"s revenue in FY06)-the Westcon Division
primarily distributes products manufactured by Nortel. In addition, the
Westcon Division distributes products manufactured by other vendors such as
Checkpoint, Nokia, ISS and 3Com Corporation and provides a wide range of
complementary voice and data networking equipment and security products in
the US, Europe, Canada, Australia and Brazil. The Westcon Division has
offices in the US and in eight other countries, including the UK, France and
Canada, and serves customers in approximately 65 countries; and
- Voda One (8% of Westcon"s revenue in FY06)-the Voda One division
primarily distributes products manufactured by Avaya for convergence, unified
messaging, call centre applications, PBX and data networking solutions. In
addition, Voda One distributes products manufactured by other vendors such as
Extreme Networks, Inc., MCK Communications, Inc., NICE Systems, Plantronics,
Inc. and Spectralink Corporation. Voda One is headquartered in the US.
In certain international markets, some products are sold across divisions due
to the size of the opportunities in those markets.
Strategy
Westcon"s strategy is to be a leading specialty distributor for its vendors
in the networking and communications equipment industry and to continue to
increase its market share in higher growth segments such as converged
networks, security and Internet protocol based applications and devices.
Specifically, the strategy is to:
- Enhance specialty sales and support services. The Directors believe that
the quality and range of Westcon"s specialty sales and support services is a
significant factor that differentiates it from its competitors and
strengthens its relationships both with vendors and customers. Westcon
intends to continue to enhance existing sales and support services and to
develop new programmes and services for its vendors and customers. For
example, its OneDefense, OneVoice, ConvergencePoint, VoicePoint and
SecurityPoint programmes are dedicated programmes that help resellers to
compete in the convergence and security markets. These programmes provide
access to sales and lead management tools and also provide information on how
to create and sell targeted solutions to various market segments;
- Expand and enhance Westcon relationships with its current vendors.
Westcon has expanded and will continue to expand its capacity to provide
sales and customer support functions to develop further its role as a sales
channel. The Directors believe that there will be a reduction in the number
of distributors authorised to purchase directly from vendors in an effort by
the vendors to reduce their costs. For example, Cisco has only three primary
distributors in the US, including Westcon, and has recently reduced the
number of distributors in Europe authorised to purchase directly from Cisco.
Westcon intends to continue to expand its operations in Europe and other
international markets in conjunction with the continued consolidation of
distributors in this industry;
Expand convergence and security product offerings and revenue. The Directors
expect the market for converged voice, data and video networks, including
VoIP, and related security will continue to grow over the next several years.
Westcon expects the demand for these networks and related components to
increase as organisations recognise the significant savings, increased
productivity and new services that are available by utilising a single,
integrated network for their communications requirements. Westcon also has
considerable expertise in security-related products and services. For
example, Westcon was one of the first major North American distributors of
Checkpoint products and is the world"s largest distributor of Checkpoint
products. Westcon intends to continue to increase its convergence and
security revenue by broadening its convergence and security-related product
offerings as it enlists additional vendors whose products support the
creation, efficiency and scalability of convergence networks;
- Add new technologies and vendors. Westcon is targeting growth from the
sale of products that utilise technologies which are complementary to
products of Westcon"s principal vendors. These technologies expand the range
of solutions Westcon"s customers can provide to end-users. The complexity of
the products and the solutions that can be designed using these technologies
creates demand for Westcon"s sales and support services, which typically
provides it with the opportunity to achieve higher gross margins. In
addition, every year Westcon aims to contract with new vendors who are
attracted to Westcon by its extensive and efficient distribution network.
During FY06, Westcon sold products of 20 vendors that it had not sold
previously. Westcon intends to continue to add new vendors, products and
technologies to its portfolio. Vendors of early-stage products are also
attracted to Westcon due to its extensive customer base, such early-stage
products typically attract higher margins than those generated by the sale of
later-stage products;
- Pursue acquisitions to increase geographic and product coverage. Scale
is becoming increasingly important in the international ICT market. Westcon
is already present in sixteen countries and will continue to pursue selective
acquisitions to expand its operations in international markets, including in
territories that are important to its principal vendors, as well as to add
products to its portfolio. In April 2006, Westcon announced that it had
acquired the assets of Ronco Distribution, the New York state based
distribution arm of Ronco Electronics and Communication, Inc. The combined
organisation has made Westcon the number one distributor of Nortel products,
by volume, in North America; and
- Focus on financial efficiencies. Westcon has improved its working
capital ratios through a disciplined approach to working capital management.
Westcon"s principal information system allows it to closely monitor key
working capital accounts and resource planning. Westcon will continue to
focus on working capital management to maintain and, where possible, improve
its liquidity.
Agreements with vendors
Westcon enters into separate master purchase agreements with its principal
and other vendors either
globally or in each of the geographic regions in which it operates. These
master purchase agreements provide a framework of basic terms that govern the
individual purchase orders that Westcon places with its vendors. The master
purchase agreements do not provide guaranteed price or delivery provisions
and they generally require Westcon to sell its vendors" products only to
resellers, systems integrators or service providers in specified regions.
General provisions
The master purchase agreements with the principal vendors are ordinarily
entered into for one to three year terms and may be extended by renewal
generally for similar periods and in some cases contain provisions for
automatic renewal. Master purchase agreements with other vendors are normally
entered into for one year terms.
Most of the master purchase agreements contain provisions that allow Westcon
to return inventory, including discontinued products, as well as price
protection provisions, which may be contingent upon Westcon"s compliance with
specified conditions. These provisions help reduce Westcon"s risk of loss due
to slow-moving inventory, vendor price reductions, product updates or
obsolete products. Westcon"s ability to return products to vendors for
credit or exchange is generally limited to a certain percentage of the value
of products purchased from the vendor during a specified period and this
right can be exercised only a limited number of times a year. Westcon"s
contractual rotation rights with its principal vendors permit it to return
and be reimbursed for between 3% and 12% of the value of Westcon"s previous
quarter"s product purchases.
Each master purchase agreement permits either party to terminate with cause
at any time, and without cause upon 30 to 180 days" notice, depending on the
vendor. Upon termination of a master purchase agreement, during a 30 to 180
day period, the relevant vendor is ordinarily required to complete Westcon"s
pending orders for its products upon the receipt of pre-payment from Westcon.
Many of the agreements provide that Westcon may require its vendors to
repurchase their products from Westcon upon termination of the agreement.
However, some of the agreements provide that the vendor is under no
obligation to repurchase its products from Westcon if Westcon initiates the
termination. If the vendor does not repurchase Westcon"s remaining inventory
of its products at the time of termination, in some cases Westcon may use the
trademarks for a period of 30 to 90 days to market those products, depending
on the vendor. In other instances, the vendor is under no obligation to
repurchase its products and may cancel all of Westcon"s unfulfilled orders
without further obligation regardless of the manner in which the agreement is
terminated.
Master purchase agreements with principal vendors
Cisco
Westcon currently has three non-exclusive master purchase agreements with
Cisco. The three agreements cover Europe, the Middle East and Africa
(``EMEA""), the US and Singapore.
The Cisco EMEA master purchase agreement was entered into on 10 October 2003.
Although the agreement expired in August 2006, a provision in the expired
contract ensures that the terms of the expired contract are enforceable until
a new contract is in place, so long as Westcon and Cisco continue to do
business. Westcon and Cisco are currently negotiating a new agreement
covering EMEA and the Directors are confident that an agreement, on terms no
less favourable than the current arrangements, will be finalised by the end
of November 2006.
The Cisco US master purchase agreement was entered into on 15 June 1999 and
is due to expire on 30 November 2006. Westcon and Cisco are currently
negotiating a new agreement and, as is the case for the EMEA agreement, the
Directors are confident that an agreement covering the US will be entered
into, on terms no less favourable than the current agreement, before its
expiry.
On 22 September 2006, Westcon entered into a new Cisco Singapore master
purchase agreement. This agreement expires on 22 September 2007 and contains
provisions for further renewal.
Nortel
Westcon has two non-exclusive master purchase agreements with Nortel. One
covers the US, Canada and Brazil and the other covers Europe.
The European agreement was entered into on 1 May 2006 and expires on 30 April
2008. The US agreement was entered into on 5 April 2002 and expires on 31
December 2007.
Avaya
Westcon has a non-exclusive master purchase agreement with Avaya covering the
US, the District of Columbia, Canada and Brazil and a series of product
specific non-exclusive agreements covering various countries in Europe, which
are governed by two sets of master terms and conditions.
The Avaya agreement in the US was entered into on 3 July 2002 and expires on
3 July 2007 and contains provisions for automatic renewal.
Under the European arrangements, two sets of master terms and conditions
govern the sale of specific products under product group agreements. Each
product group agreement is specific to certain countries within Europe. The
product group agreements commenced on different dates, however, they each
expire on 1 November 2006. Westcon is currently in the process of negotiating
a new agreement with Avaya to govern these relationships, and the Directors
are confident that the new agreements will be in place, prior to the end of
October 2006, on terms no less favourable than the current agreements.
Checkpoint
Westcon currently has one non-exclusive master purchase agreement with
Checkpoint covering the US, Canada, parts of South America, Europe, Asia and
Australia. This agreement was entered into on 13 August 1996 and will expire
on 31 December 2006. However, the agreement includes provisions that ensure
that, until a new contract is in place or renewal of the existing contract is
negotiated, parties will trade on the same terms so long as they continue to
do business. The Group is currently negotiating a new agreement and the
Directors are confident that an agreement will be entered into on terms no
less favourable than the existing agreement.
Nokia
Westcon"s non-exclusive master purchase agreement with Nokia commenced on 31
March 2003 and is due to expire on 31 March 2007. The agreement contains
provisions for automatic renewal. The Nokia agreement relates to North and
South America, certain countries within Europe and Asia Pacific.
Logicalis (18% of the Group"s revenues and 20% of Group"s EBITDA for FY06)
Activities
Logicalis is a provider of integrated ICT solutions, delivering secure,
converged computing and communications infrastructure and services. Logicalis
provides the architecture, deployment, integration and management of networks
and systems to deliver solutions to customers.
Logicalis maintains strong partnerships with technology vendors such as IBM,
HP and Cisco. Logicalis" strength is based on its expertise in being able to
provide the professional services that complement the provision of technology
products, as well as annuity-based aftersales services, such as maintenance,
support, remote monitoring and managed services.
IT infrastructure product sales principally comprise networking products
(mostly from Cisco but also from complementary technology providers such as
Checkpoint and Nokia) and server and storage system products (mostly from HP
and IBM but also Sun and EMC). These sales include a number of advanced
technology products such as IP based unified communications, wireless,
security and data storage. Professional services revenues are generated
through consulting services, network and system installation and integration
services. Logicalis also offers a variety of network, server and application
management and maintenance services, which all generate annuity revenue.
Other annuity services include the provision of bandwidth, which is sourced
from telecommunication companies for wide area networks.
Headquartered in the UK, Logicalis has operations in the US, UK, Germany and
South America (Argentina, Uruguay, Paraguay, Brazil, Chile and Peru). In
FY06, the US, UK, South American and German operations accounted for 62%,
30%, 7% and 1% respectively of Logicalis" revenue. A substantial portion of
Logicalis" historical revenue has been derived from the sale of IBM, HP and
Cisco products, which accounted for 39%, 25% and 24% respectively of
Logicalis" product revenue in FY06.
Strategy
Logicalis" strategy is built around focussed areas of expertise covering
corporate networks, IP communications, security, enterprise infrastructure
performance management, data management, application integration and
enterprise computing. These areas of expertise are supported by consulting,
design, implementation, maintenance services and managed services.
Logicalis" strategic goal is to be a leading player in its chosen
markets-offering scale, efficiency and quality of execution. To achieve this
goal, Logicalis is focussed on the following:
- Increase scale in Logicalis" core US and UK businesses. Logicalis is
focussed on continuing to implement an acquisition growth strategy to
complement its organic growth targets. The focus on organic growth combined
with acquisitions has resulted in revenues in the US increasing from $180
million in FY04 to $342 million in FY06 and in the UK increasing from $69
million to $162 million over the same period. In addition, the acquisition of
the HP end-user business from Avnet Inc in January 2006 increased Logicalis"
presence in the West Coast of the US;
- Expand technology and service offerings. The acquisitions that Logicalis
has completed during the last two years have established strong IBM
technology based businesses in both the US and UK, provided the foundations
for a HP technology based business in the UK to complement Logicalis" HP
division in the US (Logicalis is one of HP"s largest enterprise solution
providers in the US) and strengthened the contract consulting services
business in the US. Through these acquisitions, Logicalis has now developed a
more comprehensive product range. Accordingly, the business will continue to
implement its strategy of leveraging its product platform to grow its
services revenues and thereby expand the higher margin segment of its
operations;
- Exploit market growth particularly in high growth advanced technology
segments. Logicalis increased its Cisco product revenues in FY06 by 43% when
compared to FY05. Recent acquisitions have also brought strong skills in
advanced server and storage technologies into the UK operations. A specialist
services division was established in 2004 in the UK to take advantage of the
high demand from third party channel partners for specialist networking
skills. In addition, in May 2006 Logicalis acquired the US based Alliance
Consulting, which will strengthen Logicalis" offering in the growing staff
augmentation market. Logicalis will continue to seek to exploit the higher
growth ICT segments;
- Targeted geographic expansion. Logicalis will seek to increase its
geographical presence into targeted markets. Logicalis will continue to make
selective acquisitions in regions where market conditions are attractive. The
performance of Logicalis" South American operations is evidence of its
capability to quickly establish a strong position in a rapidly growing
emerging market for networking products; and
- Leverage group skills and resources internationally. Through
acquisitions, Logicalis has increased its scale in the UK and US and balanced
the technology and service offerings that it provides in both countries. This
has provided an opportunity to achieve closer co-operation between the
operations, targeting cross-geography customers and obtaining market
leverage.
Agreements with vendors
Logicalis has close relationships with a number of suppliers of both software
and hardware products. Logicalis strives to achieve the highest technical
accreditation level with each of its technological partners in all of its
regions. Major vendors with which Logicalis has agreements to resell their
products (although not in every region) include the following: HP, IBM,
Cisco, EMC, Oracle, Sybase and Microsoft. The majority of these agreements
have annual automatic renewals but some are for a fixed term and require a
formal renewal process.
There are alternative sources for purchasing the vendors" product lines but
generally the method of purchase is governed by the vendor agreements. For
example, Cisco"s products are usually purchased directly from Cisco while HP
and IBM products are purchased mostly through distributors. Over time,
Logicalis" consultants and engineers have achieved and maintained the highest
levels of accreditation with its vendors and have received numerous awards.
Analysys Mason (2% of the Group"s revenues and 7% of the Group"s EBITDA for
FY06)
Activities
Analysys Mason provides strategy, management and technology consultancy
services throughout the telecommunications, and networked-IT media sectors,
as well as research and implementation services. Analysys Mason was formed in
August 2004 out of the merger of the Analysys and Mason groups. The merger
created a specialist telecoms consultancy in the UK capable of providing both
strategy consulting and implementation services.
Analysys Mason operates through the following divisions:
- Analysys Consulting (40% of Analysys Mason"s revenue in FY06) - Analysys
Consulting provides strategy and management consultancy, information services
and start-up support to the telecommunications and media sector, working with
operators, regulators, financial institutions and others. These services
include strategy and business planning, investment appraisal, profitability
analysis, corporate finance and venturing, public sector policy definition,
market sizing, forecasting, and litigation support. These services are
complemented by wide-ranging market intelligence from Analysys Research.
Analysys Consulting"s consultants are based in Cambridge, London, Paris,
Madrid, Milan, Singapore and Washington DC. These locations enable Analysys
Consulting to reach a global client base, with 33% of its FY06 revenues
generated from Continental Europe and 25% from the UK;
- Mason (40% of Analysys Mason"s revenue in FY06) - Mason is a leading ICT
consultancy that delivers business improvement and change management to
technology initiatives. Mason focusses on three market segments:
telecommunications operators, the public sector and enterprises. Mason staff
are predominantly UK based, but also work internationally on client
assignments, 81% of its FY06 revenue was generated in the UK and 11% in
Ireland;
- Catalyst (12% of Analysys Mason"s revenue in FY06) - Catalyst is a
vendor independent consultancy, specialising in contact centre, customer
management and change management consulting; and
- Analysys Research (8% of Analysys Mason"s revenue in FY06) - Analysys
Research provides market intelligence services in the telecommunications and
media sectors. These services include telecommunications market research and
analysis, publications and benchmarking.
Strategy
Analysys Mason"s strategy is to focus on its core competency of providing
specialist consultancy services and implementation capabilities within the
telecommunications and media sectors. Analysys Mason is committed to
increasing its market penetration by pursuing geographic expansion both
organically and through acquisition. The strategy is to:
- Increase market penetration. Analysys Mason is focussed on increasing
market penetration by targetting new and developing markets such as 3G,
digital and internet protocol television technologies, triple and quadruple
play services, and consulting on industry trends such as private equity
interest in telecommunications companies, privatisation and telecommunication
market liberalisation in developing economies, regulatory initiatives in key
markets and government intervention; and
- Pursue geographic expansion. Analysys Mason is committed to expanding
its operations by pursuing organic and acquisition growth opportunities not
only in its existing markets, but also in other emerging markets. Recently,
Analysys Mason established an office in Singapore and has also made
significant progress in developing client relationships in the Middle East.
Summary Financial Information
FY04 FY05 Audited FY06 Audited
Audited $"000 $"000
$"000
Revenue
Westcon 1,840,500 2,055,015 2,283,398
Logicalis 362,919 340,875 545,598
Analysys Mason 27,352 52,058 59,750
Other Holdings 116,177 76,821 86,889
Total revenue 2,346,948 2,524,769 2,975,635
Gross margin
Westcon 162,038 158,243 194,728
Logicalis 81,243 72,162 109,182
Analysys Mason 8,244 19,134 21,730
Other Holdings 23,895 13,909 12,,524
Total gross 275,420 263,448 338,164
margin.
EBITDA
Westcon 36,171 25,043 66,635
Logicalis 2,379 9,637 16,707
Analysys Mason (723) 3,340 6,223
Other Holdings (14,039) (9,604) (4,414)
(including
Datatec head
office costs)
Total EBITDA 23,788 28,416 85,151
Operating
profit/(loss)
before goodwill
impairment
Westcon 23,781 15,420 56,861
Logicalis (5,003) 6,081 11,546
(1,400) 3,007 5,835
Other Holdings (16,317) (10,288) (4,848)
(including
Datatec head
office costs)
Total operating 1,061 14,220 69,394
profit/(loss)
before goodwill
impairment
Profit/(loss) (20,522) 7,096 63,795
before taxation
Profit/(loss) (26,383) 4,605 39,263
after taxation -
continuing
operations
Profit/(loss) - 47,259 (76)
after taxation -
discontinued
operations.
Profit/(loss) (26,383) 51,864 39,187
after taxation
Headline earnings (6.69) 3.59 26.91
per Ordinary
Share (US cents)
Current Trading and Prospects
Trading during the first half of the 2007 financial year has been in line
with management"s expectations, with the Group delivering a good performance
in terms of overall revenues and margins.
Westcon has continued to make good progress with its European businesses, in
particular, improving financial performance across all of its divisions.
Westcon"s gross margin for the period was 8.2%, remaining constant with last
year (excluding the benefit from non-recurring items last year). Operating
costs have also remained tightly controlled. During the period, Westcon US
acquired the distribution arm of Ronco Communications and Electronics (now
renamed Ronco Distribution). The acquisition expanded Westcon"s core
convergence expertise, specifically in the Nortel voice arena.
Trading in Logicalis has also been in line with management"s expectations,
with growth in all regions and a strong performance in the UK. Overall gross
margin for the period remained relatively constant at approximately 20.0%
(H106: 20.1%), despite the increase in product-based business as a result of
the strategic acquisitions made over the last 18 months. Operating costs have
remained under tight control and there remains scope for further improvement,
particularly in the US, as the benefits of scale are realised.
During the period, Logicalis US acquired the US Southwest focussed consulting
business of Alliance Consulting Inc., and Computech Resources Inc. (with
completion of the Computech Resources Inc. acquisition taking place on 1
September 2006), an IBM Premier Business Partner and solutions business.
Logicalis also acquired an interest in a small German ICT services
organisation called re:solution, and announced plans to establish offices in
Chile and Peru, to extend the Group"s presence in South America.
Analysys Mason has made good progress during the period, with the impact of
the completion of the Vodafone contract offset by a strong performance by its
strategy consulting business. The EBITDA margin for the period was 10.5%
(H106: 10.9%). Opportunities remain to broaden and deepen both the service
offering and the geographic footprint, as well as improve productivity and
operational synergies from the integrated businesses.
The Group"s net working capital at the period end increased to approximately
$259.7 million (FY06: $196.9 million), with a significant proportion of this
increase resulting from the investment in working capital in newly acquired
businesses. The Group"s net cash position (after taking into account long
term liabilities) at the period end was $80.7 million (FY06: $129.4 million).
The Directors remain confident about the Group"s prospects for the remainder
of the financial year and encouraged by the continued development of the
operations and management of the Group"s businesses. Extracting further
operating efficiencies from recent and planned acquisitions remains an
important driver in the performance expectations of both Westcon and
Logicalis.
Reasons for the Placing and use of proceeds
The Directors believe that the listing of the Company"s Ordinary Shares on
AIM and the Placing will provide the Group with greater access to capital
with which to support the continued growth of the Group"s international
businesses, both organically and by acquisition. The listing on AIM will also
provide the Group with an internationally accepted acquisition currency and
enable the Company to attract a broader range of institutional investors.
Further, the listing will also raise the Group"s commercial profile with
customers, suppliers and the media worldwide.
The Directors anticipate that the net proceeds of the Placing will be used to
fund the future development of the Group. It is the Directors" current
intention that the majority of the funds will be used for acquisitions with
the remainder used to refinance certain of the Group"s borrowings and to
provide working capital for future organic growth. The Group expects to
continue to make selective acquisitions of complementary businesses and the
net proceeds of the Placing will be used, together with the Group"s existing
resources, to fund such acquisitions. A number of acquisition opportunities
in different geographic markets are currently under active consideration by
the Group.
To the extent that the net proceeds of the Placing are not immediately used
for the above purposes, they will be placed on deposit with banks or
financial institutions. SARB requires any funds raised in the Placing which
are not used by the Group within six months of Admission, to be repatriated
to South Africa unless further approval from SARB is sought and granted to
retain the funds offshore for a longer period. However, if the funds are
repatriated to South Africa, as required by SARB, the Group expects to be
able to seek approval from SARB to remit the monies offshore, for purposes
approved by SARB, as has been the case previously.
Settlement
The Company will continue to maintain its existing South African Register
and, additionally, will establish the Jersey Branch Register as part of the
arrangements relating to the Placing, in order to enable the Ordinary Shares
to be traded both on the JSE and on AIM. On Admission, the Company"s existing
shareholders will remain on the South African Register and investors who
subscribe for Placing Shares will be registered on the Jersey Branch
Register. Non-resident shareholders and resident shareholders, where
permitted by South African Exchange Control Regulations are entitled to
remove the registration of their Ordinary Shares from the South African
Register and transfer the registration of such Ordinary Shares to the Jersey
Branch Register, and vice versa, by contacting Computershare Services plc to
obtain the necessary share removal and transfer forms.
Board of Directors
Jens Montanana-Chief Executive Officer, Age 45 (British)
Jens Montanana is the founder and chief architect behind the Company, which
he established in 1986. Between 1989 and 1993 Jens served as Managing
Director and Vice-President of US Robotics (UK) operations, a wholly-owned
subsidiary of US Robotics, now 3Com. In 1993, he co-founded US startup Xedia
Corporation in Boston, MA, an early pioneer of network switching and one of
the market leaders in IP bandwidth management, which was subsequently sold to
Lucent Corporation. In 1994, Jens became Executive Chairman of the Company
and the Company listed on the JSE. Jens also currently serves as a non-
executive director of Versatile Systems, Inc., a Canadian listed (TSX),
independent software vendor and provider of transaction solutions.
Previously, Jens served as non-executive director of JSE listed companies,
Primedia Ltd and Brait Investment Bank. Jens is also Chief Executive Officer
of Logicalis, a wholly-owned subsidiary of the Company, a role he assumed in
October 2002. Prior to founding the Company, Jens worked in various product
management, marketing and engineering roles at Computer Sciences Corporation
(CSC) and Westinghouse Ltd. Jens graduated with a diploma in Electronic
Engineering from the University of Reading, England.
David Pfaff-Group Finance Director, Age 41 (South African)
David Pfaff joined the Group with effect from 1 June 2001 as Executive
Director responsible for the Group"s Africa and Middle East operations and
for global investor relations and corporate communications. He was appointed
Group Finance Director in June 2002. Prior to joining the Group, David was a
director of Anglo American Industrial Corporation and many of its
subsidiaries. David is a qualified accountant and has a Post Graduate Diploma
in Social Studies from Oxford University.
Leslie Boyd-Independent Non-executive Chairman, Age 69 (South African)
In addition to his position as Chairman of the Company, Leslie Boyd is
Chairman of Imperial Holdings. Leslie is also a director of a number of other
companies including Aspen Pharmacare Holdings, Columbus Stainless, Highveld
Steel and Vanadium Corporation, Sun International and The Tongaat-Hulett
Group. In the past, Leslie has also held chairman positions at several of
these companies. Leslie retired as Executive Vice Chairman of Anglo American
plc in May 2001, having served as Deputy Chairman of Anglo American
Corporation of South Africa from 1992. Leslie was the founding President of
the South African Chamber of Business in 1990 and was President of the South
African Foundation 1999/2000.
He is a Chartered Engineer (UK) and a fellow of the Institute of
Metallurgists (UK), a companion of the British Institute of Management and a
member of the Institute of Directors (South Africa).
Cedric Savage-Independent Non-executive Director, Age 67 (South African)
Cedric Savage commenced his career in the UK in 1960 as a graduate engineer
with Fairey Aviation and in 1963 returned to South Africa where he worked in
the oil (Mobil), textile (Felt & Textiles) and the chicken (Rainbow Chickens
Limited) industries. In 1993/1994, he was appointed President of the South
African Chamber of Business. He has also served as Chairman of the Board of
Governors on the Natal University Development Foundation and as a member of
Council of the University of Natal. He joined The Tongaat-Hulett Group in
1977 as Managing Director of Tongaat Foods and thereafter Executive Chairman
of the Building Materials Division, Chief Executive Officer of The Tongaat-
Hulett Group Limited in 1991 and in May 2000, the dual roles of Chief
Executive Officer and Executive Chairman. He is currently Non-Executive
Chairman of The Tongaat-Hulett Group Limited and serves on the Boards of
Hulett Aluminium (Pty) Limited, Kumba Resources Limited, Nedbank Group
Limited and Harmony Gold Mining Company Limited. Cedric is a member of the
Institute of Directors, The Institution of Certificated Mechanical and
Electrical Engineers, South Africa, and the South African Institute of
International Affairs.
Colin Brayshaw-Independent Non-executive Director, Age 71 (South African)
Colin Brayshaw is currently Chairman of Freestone Properties and a non-
executive director on the boards of a number of listed companies, including
Anglogold, Anglo Platinum, AECI, Johnnic Communications, Highveld Steel and
Vanadium Corporation. Previously he was Chairman and Managing Partner of
Deloitte & Touche (South Africa) and various of its predecessor firms. Colin
is a qualified accountant and sits on the audit committees of a number of
companies. Colin is a governor of the University of Witwatersand Foundation.
Chris Seabrooke-Independent Non-executive Director, Age 53 (South African)
Chris Seabrooke was appointed to the Board in 1994 at the time of the listing
of the Company"s shares on the JSE. Prior to the Company"s listing, a private
equity firm controlled by Chris had been an investor in the Company since
1986. Chris has been a director of over twenty listed companies. On the JSE,
he is currently CEO of Sabvest Limited, Non-Executive Chairman of Massmart
Holdings Limited, Metrofile Holdings Limited and Setpoint Technology Holdings
Limited, and a non-executive director of Primedia Limited. On NASDAQ, he is a
non-executive director of Net1 U.E.P.S. Technologies Inc. He is a former
Chairman of the South African State Theatre and former Deputy Chairman of the
inaugural National Arts Council of South Africa and the founding Board of
Business & Arts South Africa. Chris holds Bachelor of Commerce and Bachelor
of Accounting degrees from Natal University, a Masters of Business
Administration degree from the University of the Witwatersrand Business
School, is a Fellow of the Institute of Cost and Management Accountants in
the UK (FCMA) and is a member of the Institute of Directors in South Africa.
Nick Temple-Independent Non-executive Director, Age 58 (British)
Nick Temple has had a distinguished career at IBM spanning more than 30
years. Nick worked in various positions around the world and became one of
IBM"s most senior international executives. He started his career in 1965 as
a systems engineer and moved into the development of software products for
distributed processing. After an assignment at IBM"s corporate headquarters
in Armonk, Nick established an integrated business unit responsible for
designing, manufacturing and selling banking specialist products to the
banking industry.
In 1987, he became the Vice President of Product Management, EMEA,
responsible for all product introductions. In 1989 he took over
responsibility for Belgium, Luxembourg, Holland, Spain, Switzerland and
Eastern Europe. In 1991, Nick was appointed to the position of Chief
Executive Officer of IBM UK. In 1994 he returned to IBM EMEA Headquarters in
Paris and was responsible for all the direct sales in EMEA before leaving in
1995.
He currently serves as a director of numerous companies. Until recently, Nick
served as Chairman of Blick plc, which was successfully sold in the beginning
of 2004. He is Chairman of Retail Business Solutions, Tax Computer Systems,
and FoxIT. He is also a non-executive director of Electrocomponents plc,
DataCash plc and 4imprint plc.
Wiseman Nkuhlu-Independent Non-executive Director, Age 62 (South African)
Wiseman Nkuhlu is a chartered accountant and currently serves as Chairman of
Pan-African Capital Holdings (Pty) Ltd and holds directorships with Kagiso
Trust Investments, Virgin Active South Africa, Old Mutual SA Limited and Old
Mutual PLC. Between October 2000 and July 2005, he served as economic advisor
to President Thabo Mbeki and Chief Executive of the Secretariat of new
Partnership for Africa"s development NEPAD.
Sandton
9 October 2006
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 09/10/2006 07:31:20 AM Produced by the JSE SENS Department
|