http://www.engineeringnews.co.za/article/datacentrix-wins-print-outsourcing-deployment-contract-for-world-cup-2009-04-21

Datacentrix wins print outsourcing deployment contract for World Cup

Published 21 Apr 09       By: Leandi Kolver
Information technology (IT) services and solutions provider Datacentrix has won a print outsourcing deployment contract for the 2010 FIFA World Cup.

“In the print services space, we have seen a lot of activity and won a lot of deals, which we are executing in the next couple of months and we see an appetite for that solution in the marketplace.

“There is great demand for this niche solution and if we do it well, we will see a lot of growth in that area,” said Datacentrix CEO Ahmed Mahomed at the company’s interim results presentation in Johannesburg on Tuesday.

Although Mahomed declined to elaborate the matter, he did divulge that the contract included the management of the entire printing infrastructure at all the 2010 FIFA World Cup stadiums.

The JSE-listed company’s chairperson, Gary Morolo, said that even though the company is over 50% black managed, there was room for improvement at senior executive level.

He added that there are no obvious vacancies, and the company was seeking to bring in new skills at management level without dislocating what was a smooth functioning team.

On staff retention, he noted that the cooling of the market had resulted in conservatism by staff on changing jobs, however, the issue did not go away.

“We would hate to be caught with our pants down once the environment changes, and we would like to know that we have done our best to take measures to retain our staff,” he commented, saying that the company has recently invested highly in upskilling and hiring experienced staff.

Within the context of the generally challenging economic climate, the company’s revenues increased by 12% to R1,5-billion, compared with R1,35-billion the year before.

Its earnings before interest, taxation, depreciation and amortisation (Ebitda) grew by 5% to R165,5-million, compared with R157,1-million the year before.

Further, the company’s diluted headline earnings a share had increased by 19,6% to 61c a share, compared with 51c a share the year before.

In addition, Ebida margins were at a healthy 10% in an increasingly competitive environment.

"Our 2009 financial year-end results, though short of our own expectations, are positive and commendable in a year that has undoubtedly been tough for most companies, including those within the IT sector," said Morolo.

"We continue to have strong cash generation and a healthy balance sheet in an environment that began to turn negative with the explosion of the subprime bubble in 2007."

The business solutions division experienced a difficult year not only because of current market conditions, but also as a result of some vendors changing their route to market in the archiving and enterprise content management space. This has necessitated a repositioning of this business.

Mahomed added that vendor activity was still an issue it had to keep an eye on. “One of the key issues is how the vendors go to market,” he added.

On the contrary, however, the business process management business had a robust performance in the year under review.

In the context of the current economic slowdown, the company maintained that organisations would focus on efficiencies and driving down costs, including IT outlay, to preserve bottom lines.

He noted that the future growth for the group would be principally organic, supplemented by selective acquisition of pockets of excellence in identified synergistic growth areas.

"The current climate has the potential to stimulate consolidation in the market, offering opportunities to access new clients in the commercial space," Mahomed added.