Didata cautious in "mixed" market

Great rates: Didata claims it will benefit from other currencies' strength against the US dollar

After a constant currency drop in first-quarter revenues, integrator Dimension Data (Didata) is to tread with caution in 2010 and claims the market remains "mixed".

Global revenue for the three months to the end of December fell nine per cent annually on a constant currency basis. Didata attributed the drop to a strong performance in Q1 2009.

An interim management statement, published today, said: "The effects of the global economic downturn were only felt from Q2 2009. Comparisons are therefore expected to become more favourable in the second quarter of this financial year. "

The company claims its Systems Integration (SI) unit enjoyed a strong Q1 2010, particularly in the US. However, this was offset by the under-performance of Plessey, a Didata-owned African telecoms business.

Using the constant currency yardstick, the integrator revealed sales in Africa, Australia and Europe all rose annually, while Asian turnover "reduced slightly". Didata claims its operations across the Americas posted "a significant improvement in operating profit".

The firm's Internet Solutions business boosted both revenue and operating profit, but its Express Data arm saw sales fall. Overall, Didata claims its first quarter numbers represent "a sound performance".

The statement added: "There were no major changes to working capital and the group’s cash position remained strong throughout the period.

"Looking forward, we are seeing improved demand in some regions, although the overall demand environment by region and business remains mixed."

The integrator is expecting worldwide Q2 sales to remain flat in constant currency terms, with single-digit growth projected for the year's second half. It added that, barring major exchange rate movement, its first-half results would benefit from the strength of other major currencies against the US dollar.

The statement concluded: "We remain optimistic about the positioning and prospects for Dimension Data, both in the short and medium-term and continue to see good opportunities for growth in many parts of the group.

"We are committed to continuing to invest in our execution capabilities and to enhancing our competitive position to capture opportunities in the markets within which the group operates."