17 May 2006
Logicalis Delivers Another Year of Record Breaking Revenue Growth
Parent Datatec considering secondary listing on London's AIM Market
Logicalis has delivered another year of record-breaking revenue growth. Revenue was $545.6 million for the year ended 28 February 2006, which includes $105.3 million arising from the acquisitions made during the year. This compares to revenue of $340.9 million from continuing operations in 2005. Excluding the impact of acquisitions, revenue increased by 16% over the prior year on a like-for-like basis.
The EBITDA for the year rose to $16.7 million compared to $9.6 million in the previous year. The 2006 EBITDA includes a charge of $1.0 million relating to share-based payments under the requirements of IFRS2 which have been applied for the first time. The acquisitions made during the year contributed $3.7 million to EBITDA.
Logicalis made five acquisitions during the review period. In March 2005, it acquired Notability Solutions Limited (subsequently renamed Logicalis Computing Solutions Limited), a $40 million-a-year IBM business partner in the UK and also acquired Eisco Technology Inc., a $15 million-a-year US IBM solution provider focused on high-end IBM z-Series mainframe solutions.
In July 2005, Logicalis acquired Hawke Systems Limited, a $25 million-a-year supplier of advanced computing infrastructure and one of HP's leading Enterprise Partners in the UK.
In September 2005, Logicalis acquired TBC Group Limited, a $50 million-a-year IBM Premier partner and supplier of advanced computing infrastructure and managed service solutions, based mainly around the IBM Unix range, database applications and IBM middleware. In January 2006, Logicalis acquired from Avnet Inc. its US end user HP business, a $100 million-a-year HP premier partner business focused mainly on HP server and storage solutions.
Commenting on the year, Logicalis and Datatec chief executive officer, Jens Montanana says. "The Logicalis business has overall performed strongly. Our efforts have also been recognised by our vendor partners with Logicalis winning seven awards from Cisco and IBM in the past year, including Cisco's European Service Partner of the Year and Cisco's Worldwide Enterprise Partner of the Year". Montanana went on to add "The acquisitions we have made have extended our product and service offering considerably. We are likely to continue to seek acquisitions where it is strategically relevant."
Datatec results
Logicalis' parent company, Datatec, the JSE listed international IT networking and services group, has posted a 18% increase in revenue to $2.98bn (2005: $2.52bn) and a nearly six-fold increase in operating profit to $69.0m (2005: $10.9m) for the year to February 2006.
Montanana emphasises all major divisions within the group performed soundly during the period. "Trading conditions in our major markets in the US and Europe remained remarkably buoyant, despite interest rate hikes in the US and ongoing nervousness driven by instability in the Middle East and the threat of spiraling oil prices."
Looking to the year ahead, Montanana expects demand for IT hardware, networking and services to remain robust in the face of moderating growth in the Group's major markets.
"We will continue to plan prudently and expect ongoing improvements in our performance over the current business cycle. Against this background, we are giving consideration to a secondary listing on the AIM market of the London Stock Exchange," he notes.
About Logicalis
Logicalis is a global provider of high-performance technology solutions. Logicalis and its affiliated companies employ 1,000 people worldwide, including highly-trained service specialists who specify, design, deploy and manage IT infrastructure to meet the needs of over 5,000 corporate and public sector customers. Logicalis maintains strong partnerships with technology leaders such as HP, IBM, Cisco and EMC.
Logicalis is a part of Logicalis Group, a division of Datatec Limited (DTCJ.J), a $3 billion business listed on the Johannesburg Stock Exchange. With its international headquarters in the UK, Logicalis Group has annualized global revenues of approximately $700 million from operations in the U.S., UK, Germany and South America. For more information, visit www.logicalis.com.
About Datatec
Datatec is a leading international networking, systems and IT services company listed on the Johannesburg Securities Exchange (JSE) in South Africa, with operations in many of the world's leading economies. Datatec's international operations contribute in excess of 95% of the Group's revenues mainly from the United States and Europe. The Group positions itself as an active technology holding company focusing on investing in and developing lines of business which are complementary to its positioning as a networking, systems, integration service provider and consultancy group.
The group employs approximately 3 000 information and communication technology (ICT) professionals around the world in over 20 countries in three principal subsidiaries –
Westcon, New York based and one of the world's largest value added distributors of convergence, security and IP products, sourced largely from global market leaders Cisco, Avaya and Nortel.
Logicalis, London based and an international provider of high performance IT systems and integration solutions based on strong strategic alliances with market leaders Cisco, HP and IBM.
Analysys Mason, Cambridge based and a leading international telecommunications, convergence, IT strategy and management consultancy providing business solutions to public and private sector organisations world-wide.
The group's other interests comprise Westcon AME and Online, mirrors of Westcon's operations in the US but with the focus on markets in the Middle East and Africa, and RangeGate, a specialist mobile solutions provider to blue chip companies in the UK and South Africa. For more information, visit www.datatec.co.za.