17 May 2007
Logicalis grows apace ahead of the market
Acquisition and strategic partnership approach fuels expansion of Logicalis, part of the Datatec Group
17th May, 2007, Slough, England: Logicalis reported a strong set of results for the year ended 28 February 2007 - revenue was $696 million representing growth of 37% (including $43 million arising from acquisitions made during the year). This compares to revenue of $505 million in FY2006. Excluding the impact of acquisitions made during FY2006 and FY2007, revenue increased by 11% over the prior year on a like-for-like basis.
Product sales growth of 38% year on year, generated additional demand for consulting and technical services which increased by 34%. Managed services grew 35% year on year. Revenues from application integration and contract staffing increased 63%.
Gross margin for the year increased to 22.3% (2006 restated: 21.6%). EBITDA for the year rose to $26.8 million compared with $16.7 million in the previous financial year, an increase of 60%. After charges for depreciation and amortisation of intangible assets, the total operating profit (EBIT) was $18.8 million (FY2006: $11.6 million operating profit).
Ian Cook, Group Chief Executive, Logicalis, says: "These positive results build on the previous two years of growth by Logicalis. We will continue to develop our operation in line with our strategic objectives, improving our profit margins and ratios, driving service based Lines Of Business, and enhancing our key vendor status through collaboration and innovation. This will be fundamental to increasing the value of Logicalis both as a company, and as a partner to customers and vendors."
He continued: "Expansion into new regions, led by customer demand, will certainly be a priority in the near future. The emerging Central European markets, as well as Asia Pacific, may hold some exciting opportunities for us, but we will continue to strengthen our established businesses in the US, UK and South America. For Logicalis to become a dominant international player, we will carry on recruiting and retaining the best available talent in all markets, and push the boundaries of technology and innovation to ensure our customers, employees and shareholders continue to see us as a safe pair of hands."
During the financial period under review, Logicalis undertook and completed three major acquisitions. In the US, the Group acquired Alliance Consulting, in May 2006, and Computech Resources Inc (CRI), an IBM Premier Business Partner and solution provider, in September 2006. In the UK: CSF Solutions, an IBM and HP enterprise IT solutions provider was acquired in December 2006. Logicalis is now not only the UK's largest IBM Systems z partner but also one of the very few IBM channel partners that can support the entire IBM System z-, i-, p- and x- server solutions portfolio on both sides of the Atlantic. As part of the agreement, Logicalis also agreed to acquire a Tier 3 data centre located in Bracknell, Berkshire. The data centre was acquired in March 2007.
Logicalis also acquired an equity interest in a small German ICT services organisation called re:solution, and opened offices in Chile and Peru, to extend the Group's presence in South America. In 2007, the company won IBM's top award for business partners in the Americas, the IBM Business Partner Excellence Award and Logicalis UK was presented with Cisco's ‘IP Communications Partner of the Year` and ‘Services Partner of the Year` award, for the second time in succession.
Datatec Results
Logicalis' parent company, Datatec, the JSE and LSE listed international IT networking and services group, has posted a 17% increase in revenue to $3.2bn (2006: $2.7bn) and a 45% increase in operating profit to $100m (2006: $69m) for the year to February 2007.
Commenting on the year, Datatec chief executive officer, Jens Montanana says. "We have achieved another year of strong organic growth across the Group with notable increases in profitability and market share from Logicalis and Westcon, and an increasing contribution from emerging markets. We have also completed a number of acquisitions around the world which have significantly increased Datatec's scale, as well as enhanced our product mix and geographical presence. All of these factors have enabled us to grow our profits and improve our margins."
About Logicalis
Logicalis is an international provider of high-performance IT integration solutions. With its international headquarters in the UK, the Logicalis Group employs 1200 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: Cisco; HP and IBM. In addition, Logicalis in the UK has achieved independent certification for its integrated management system supporting high quality responsible IT services and secure communications solutions supported with integrated quality, Information Security, IT Service and Environmental management systems: ISO 9001:2000, ISO 27001, ISO 20000 and ISO 14001 respectively.
Logicalis has annualised global revenues of around $900 million from operations in the U.S. , UK , Germany , and South America . The Logicalis Group is a division of Datatec Limited, a $3.2 billion revenue business listed on the Johannesburg and London AIM Stock Exchanges.
For more information, visit www.uk.logicalis.com
For more information, please contact:
Amy Mills / Finola Urquhart
Fleishman-Hillard
+44 (0)207 395 7186 / 7154
amy.mills@fleishmaneurope.com / finola.urquhart@fleishmaneurope.com