LONDON (AFX) - Shares in Dimension Data PLC gained in morning deals as
investors welcomed the group's solid full year results and return to profit,
prompting Merrill Lynch to raise its price target to 40 pence from 37, dealers
said.
At 9.15 am, shares in Dimension Data gained 3/4 pence to 30. The FTSE 250
was off 4.6 points at 6,553.3.
Merrill said Dimension Data's results were better than expected, and
highlighted "excellent growth" in the solutions business.
It noted that only UK operations came in below its forecasts due to
restructuring at Merchants.
Merrill Lynch reiterated its 'buy' rating and increased its 2005 EPS
forecast by 19 pct.
UBS also noted strong full year results, with "improving results"
geographically, and margins broadly flat or better everywhere.
It added the group's outlook remains "broadly positive", but awaits further
news from the analyst meeting as the group has given a "relatively bland outlook
statement".
UBS reiterated its 'neutral' rating and 33 pence price target.
Earlier this morning, the UK-listed South African IT services group said
that for the year to Sept 30, it made a profit before tax and amortisation of
goodwill of 38.3 mln usd, turning over a pretax loss of 6.8 mln a year ago.
Operating profit for the full year period was 33.0 mln usd, turning over a
9.0 mln operating loss a year ago.
ck/wf

DIMENSION Data posted a set of annual results yesterday that suggested it is well on the way to recovery. Revenues grew by 17.5 per cent overall and advanced in 16 of the 18 market segments identified by the company. Losses were translated into profits as the company got shot of inherent loss makers, kept a lid on overheads and, most importantly, sold more stuff.

Positive cashflows enabled the company to report that it sat on a 160 million pile of cash at the end of September this year compared with 140 million 12 months previously. Dividends, though still a distant prospect, are also a little less distant.

Investors were badly burned by Didata, a South African company by origin, when the company first had shares traded in London at the height of the dot-com boom. Legions of excitable investors found themselves convinced that Didata had some sort of licence to print money. The bubble burst and the share price slumped from 693p to 13p when it became apparent that the Didata business was much more mundane than they thought. Technology may have been the trade but the profit margins were vanishingly thin for all that.

While yesterdays numbers did point to a much improved performance, the overall profit margin was still a waferish 1.1 per cent. If economic growth around the world remains robust and demand for computer hardware and software persists, Didatas margins will show more progress. Subtract the 12p a share cash equivalent from the share price and the prospective p/e ratio is an attractive looking, but risky, 18. Buy.

climbing nicely. hopefully gain some support at 40p. any views?

Any thoughts on currebt share price,seems to be slowly heading downwards

Any views on the downward trend on this stock?,much appreciated

Thnks bugsy,better now

Bugsy,looks like ddt has bottomed out,what do you think?

Nice little tick up today.

Another little tick up this am,could be its back on the way north!!

Any more views on ddt queen?,do you think its on its way?

Capetown - well, no crystal balls I'm afraid but if it breaks through 33.5p where there's been a little resistance lately I think it could be. It performance over the last couple of weeks has been good in comparison with the wider markets so perhaps a corner is being turned.

Queen,Good results?,nice move in the right direction!

Excellent results capetown, and a good move north yesterday. Today's pull-back was to be expected but I think these could really start to motor now. May look at increasing holding :-)

Hi queen,hope you held on to these,looks like we finally breaking out of the 32/33p range?

Bugsy,how are you,what you think ddt is up2?,does it look like a breakout?

Hi queen,

What you think of DDT these days?,

I am still holding,but getting a little frustrated at them?,any thoughts would be appreciated

i`m holding, slow steady breakthrough of 33p-34p,crab like movement over several weeks, to me thats a good positive sign of moving north in future , maybe not rocketing like some others but a steady climb to around 37p-38p then crablike for a time before making an assault on the 40p mark, last acc. fig. were good, nothing to say next one will be worse, but dyor

gem,agreed,just that there has been a sell recomendation on tdwaterhouse,
Now
! BUY,
1 HOLD
1 SELL

Bit i saw good article weeks ago,basically saying it would break throug to 70pence.

i take these buy/sell recommendations with a pinch of salt, when they tell you to buy they usually have a big seller lined up and viceversa, only my opinion.dyor.

gem,agreeed,
Can you tell me why most of the DDT are AT trades?

i think it`s because brokers are putting through multiple orders at the same time, if you look at the trade times, very often, in twos threes and sometimes fours they are timed the same, call me sceptic but it`s another way of disguising true trades, only my opinion,dyor