Dimension Data builds on turnaround

Dimension Data builds on turnaround

Dimension Data Holdings' chief executive Brett Dawson said the group's strategy for the next few years will focus on growth.

The group reported a total profit of $1.6m in its interim results, against a loss of $28.8m in its 2003 second-half results. The company also reported an 8% revenue growth of $1,176.7m, against $1,087.7m for the previous six months, as well as a $9.9m operating profit, against a loss of $4.5m for the previous period. Dawson says, "We are back in profit, where we are certainly going to stay."

In 2003 Dimension Data initiated a strategy to "stop the bleeding", and started the global implementation of turnaround strategies. According to the group's profit announcement these seem to be working.

The next phase of the strategy, in 2004, is to focus on stabilising the company and investing in growth. To achieve this, Dawson says the critical focus lies in market share gains, solution group growth, service efficiency, customer experience enhancement and increased cost control.

Dawson said the drivers behind the growth strategy are the pick up in demand in some regions, an increased external focus of the group, market share gains, a strong growth in solutions revenue, and the partnerships with Cisco Systems, EMC and Microsoft.

"We have secured the low-hanging fruits, now we expect stability," Dawson said, noting that the group's product offerings still remain a key element of its growth strategy.

"We aim to provide more comprehensive solutions to customers in the areas of security, platforms, IP convergence, customer interactive solutions and application integration. These areas constitute 23% of our business, and we need to give our attention to further growing revenue through solution provision," he said.

Looking to the future, Dawson said, "While the competitive environment remains tough, the combination of an improved demand for ICT services, greater external focus and better execution should continue to drive the performance of the group in the second half of the year. We will continue to focus on overall profitability and margin stabilisation, aided by the ongoing turnarounds in under-performing regions and a reduction in central overheads, due to a lower investment in services."

Theo Boshoff writes for Computing South Africa


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