Downbeat DiData suffers £1.1bn loss

COMPUTER services group Dimension Data has unveiled a $1.6bn (£1.1bn) loss in its first full year as a listed company, as write-downs against acquisitions and exceptional charges hammered its bottom line.

The former FTSE 100 group, brought to a dual listing from its native South Africa by Merrill Lynch in a move which raised £800m in July 2000, described the downturn in the global market for its services and products as equivalent as a once-in-100-years event.

The group says it is now 'rightsized' to deal with the current downturn after axing almost 1,600 jobs. But chief executive Jeremy Ord is braced for a further decline in net margins from 7.4% to just over 5% this year and revenue growth is unlikely to reach double digits this year. The shares, floated at 520p last year, fell 8 1/2p to 92 1/2p. 'We have taken a long, hard look at the costs and we are managing the balance sheet but also preparing ourselves for a change in the market when it comes,' Ord said.

DiData described prospects in Britain as uncertain, and in the US, where business has been hit by the 11 September terrorist attacks, as extremely uncertain.

In the year to 30 September DiData's turnover, which had been expected to grow by 60%, rose 24% to $2.46bn. Like-for-like organic growth was 9% and loaded into the first half of the year.

Net cash outflow was $944m as the group went on a buying spree, including May's $448m cash purchase of US group Proxicom. That spree has left the firm booking $148m in write-downs against the expansion, and taking a further $59m in charges against deals in the UK for Plessey and call centre business Merchants Group. Cutting the workforce to 10,000 cost $17m, but a further $1.2bn in goodwill impairment came with tidying up its European structure.

Ord said the company had not overpaid or overestimated the expansion spree. The headline losses were largely irrelevant because they were not a cashflow issue, he said. Core earnings before charges, interest and amortisation were slightly under target at $176m from $210m last year. Net losses per share widened to 139.3p from 16.9p.