Dimension Data’s 'very good year'

Dimension Data gave itself a pat on the back yesterday for a “very good year”, which saw it return to the black.

Sales at the networking reseller group advanced 13.8 per cent to $2.83bn for the 12 months to 30 September 2005, and net income was $17.764m (2004: -$37.803m).

The South African-domiciled firm notes a “favourable demand environment” for its skills and it expects this to continue into 2006.

But the company’s good year did not extend to continental Europe, where sales grew just one per cent over the year – weak networking equipment sales are blamed. In September, DiData amalgamated the UK and continental Europe into one operating region under a single management team. The company took a $.4m hit for restructuring costs, falling mainly in Sweden, Germany, Italy and France.

DiData is busily building up a software and services arm, through acquisition and through organic growth, but lower-margin network integration – i.e. selling and installing kit – continues to account for more than half of turnover.

The group ended the year with $417m in cash and short-term investments, but there is no prospects of dividends just yet. The company is reviewing its dividends policy, but considers it “important to retain a strong positive cash position to provide a sense of stability to our customers, and to allow us to take advantage of opportunities that continue to present themselves across ourGroup”.

DiData earnings statement ®