Services key to DiData after solid H1

Integrator eyes continued transitition to services-centric firm after encouraging results

Currency puzzle: fluctuations helped paint a confusing picture in DiData's H1 results

Integrator Dimension Data (DiData) posted double-digit top- and bottom-line growth for the first half of its financial year but yo-yoing global currencies helped paint a less clear-cut picture.

Worldwide revenue for the six months to the end of March rose 11.1 per cent annually to $2.2bn. Operating profit reached $107.5m, an increase of 21 per cent on the same period last year.

But, in constant currency terms, H1 revenue was down 3.7 per cent as the year's first quarter saw sales drop, before growth returned in Q2. The shaky Q1 was apparently fuelled by "a sharp deterioration" in revenue from Plessey, DiData's African telecoms wing.

Services was the company's top performer during the year's first six months, with managed services revenue up 7.4 per cent and professional services rising 3.1 per cent. In total, services now represents 42.1 per cent of DiData's system integration business, a 3.5 point increase on last year's figure.

DiData chief executive Brett Dawson indicated he is "optimistic about the group's short- and medium-term prospects". He claimed that the market is poised for growth and that his firm is well placed to take advantage.

“We are optimistic about our market positioning and relevance and believe that the market has turned in terms of clients’ willingness to spend on IT and IT Services," he said. "In response, we continue to invest in resources to meet market demand and accelerate our services strategy.

"We anticipate that the second half of 2010 will see further recovery in client spend and are confident that our revenue targets of single-digit constant currency growth in revenue for the full year are achievable.”

“Growth and operating leverage remain key objectives. Looking towards the next three to five years, we have set an objective of growing constant currency revenues by at least 10 per cent on a compound basis, with services growing ahead of product revenues, and are targeting a seven per cent operating margin by 2015.

"This margin improvement will be driven by a greater contribution from services and a focus on efficiencies of scale. We are investing to reach these growth targets and to ensure our transition to a services-led company continues to track to plan.”