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Dimension Data Hldg (DDT)

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Wednesday 14 May, 2003

Dimension Data Hldg

Interim Results

Dimension Data Holdings PLC
14 May 2003

Wednesday 14 May 2003 - Embargoed for 7.00am



                          Dimension Data Holdings plc

                           Unaudited Interim Results

                         Six Months ended 31 March 2003



Dimension Data Holdings plc ("Dimension Data" or the "Group"), a leading global
technology Group, announces its results for the six months ended 31 March 2003.



Financial Results

•         Total turnover of $1,012.5 million (H2 2002: $1,085.3 million)

•         Total operating loss before goodwill amortisation and exceptional
          items $4.5 million (H2 2002: Profit $5.2 million)

•         Net loss on ordinary activities before goodwill amortisation and
          exceptional items $6.3 million (H2 2002: Profit $3.5 million).  
          Total loss $194.9 million (H2 2002: $1,887.7 million)

•         Basic loss per share before goodwill amortisation and exceptional
          items 0.5 cents (H2 2002: Earnings 0.3 cents). Basic loss per share 
          14.5 cents (H2 2002: 145.3 cents)

•         All regions other than the US were profitable at the operating level

•         Cash at bank and in hand amounted to $292.0 million



Sequential profit and loss analysis

(Before goodwill amortisation and exceptional items)


                                                                         Unaudited                        Unaudited
                                                                  Six months ended                 Six months ended
                                                                     31 March 2003                30 September 2002
                                                                             $'000                            $'000

Turnover
Group turnover                                                             977,818                        1,045,147
Associates                                                                  34,693                           40,176
                                                                    --------------                  ---------------
Total turnover                                                           1,012,511                        1,085,323
                                                                    ==============                   ==============

Operating (loss)/profit before goodwill amortisation
and exceptional items                                                      (7,039)                            2,881
Share of operating profit in associates                                      2,536                            2,272
                                                                    --------------                  ---------------
Total operating (loss)/profit                                              (4,503)                            5,153
Investment income                                                            2,186                              819
Net interest (payable)/receivable                                          (1,224)                              646
                                                                    --------------                  ---------------
(Loss)/profit before taxation                                              (3,541)                            6,618
Taxation                                                                   (6,444)                          (2,734)
                                                                    --------------                  ---------------
(Loss)/profit after taxation                                               (9,985)                            3,884
Equity minority interests                                                    3,654                            (355)
(Loss)/profit for the period before goodwill
amortisation and exceptional items                                         (6,331)                            3,529
                                                                    ==============                   ==============

                                                                          US cents                         US cents

Basic (loss)/earnings before goodwill amortisation
and exceptional items per ordinary share                                     (0.5)                              0.3
                                                                    ==============                   ==============






                                                                          Unaudited                         Unaudited
                                                                   Six months ended                  Six months ended
                                                                      31 March 2003                 30 September 2002

                                                                              $'000                             $'000
Reconciliation to consolidated profit
and loss account
(Loss)/profit for the period before goodwill
amortisation and exceptional items                                          (6,331)                             3,529
Goodwill amortisation - subsidiaries                                      (166,585)                         (336,813)
Goodwill amortisation - associates                                          (1,613)                           (2,284)
Net exceptional items                                                      (20,324)                       (1,552,141)
                                                                     --------------                   ---------------
Loss for the period as presented in the
consolidated profit and loss account                                      (194,853)                       (1,887,709)
                                                                     ==============                    ==============



Geographical analysis


                                        Unaudited            Unaudited         Unaudited              Audited
                                       Six months           Six months        Six months
                                            ended                ended             ended           Year ended
                                         31 March         30 September          31 March         30 September
$'000                                        2003                 2002              2002                 2002
Turnover

Africa                                    170,988              137,391           155,475              292,866
Asia                                      166,808              193,899           211,009              404,908
Australia                                 157,123              208,188           156,421              364,609
Continental Europe                        183,400              172,377           188,397              360,774
United Kingdom                            114,089               90,471           103,181              193,652
United States                             182,897              242,821           260,932              503,753
Other*                                      2,513                    -                 -                    -
Group                                     977,818            1,045,147         1,075,415            2,120,562
Associates                                 34,693               40,176            26,593               66,769
Total                                   1,012,511            1,085,323         1,102,008            2,187,331

Operating (loss)/profit

Africa                                     10,900                6,090            13,937               20,027
Asia                                           26                4,979            11,982               16,961
Australia                                   3,430                4,562             5,626               10,188
Continental Europe                          3,065                5,089            13,602               18,691
United Kingdom                              4,633                4,460             4,184                8,644
United States                            (11,514)              (9,137)               116              (9,021)
Other*                                 (17,579)**           (13,162)**          (11,366)             (24,528)
Group                                     (7,039)                2,881            38,081               40,962
Associates                                  2,536                2,272             2,192                4,464
                                          (4,503)                5,153            40,273               45,426
Goodwill amortisation                   (168,198)            (339,097)         (385,183)            (724,280)
Operating exceptional items              (14,311)          (1,553,475)         (351,292)          (1,904,767)
Total operating loss                    (187,012)          (1,887,419)         (696,202)          (2,583,621)

Operating margin

Africa                                       6.4%                 4.4%              9.0%                 6.8%
Asia                                         0.0%                 2.6%              5.7%                 4.2%
Australia                                    2.2%                 2.2%              3.6%                 2.8%
Continental Europe                           1.7%                 3.0%              7.2%                 5.2%
United Kingdom                               4.1%                 4.9%              4.1%                 4.5%
United States                              (6.3%)               (3.8%)              0.0%               (1.8%)
Group                                      (0.7%)                 0.3%              3.5%                 1.9%
Associates                                   7.3%                 5.7%              8.2%                 6.7%
Total                                      (0.4%)                 0.5%              3.7%                 2.1%



*  Comprises Investment holding and management and Protocol

** Group $6.6 million (H2 2002: $5.8 million) and Solutions and Services $10.9
million (H2 2002: $7.4 million).  Group costs include Investment holding and
management and Protocol.  Solutions and Services comprise costs associated with
the development and implementation of Solutions which are not allocated to
regions.



Turnover analysis by service offerings


                               Africa      Asia    Australia      Europe       United       United        Total
Six months ended                                                              Kingdom       States
31 March 2003                   $'000     $'000        $'000       $'000        $'000        $'000        $'000

Product                        53,733   100,403      116,238     115,210       37,485      134,186      557,255
Managed services*              78,958    34,152       18,174      42,245       52,883       12,183      238,595
Professional services          38,297    32,253       22,711      25,945       23,721       36,528      179,455
Group**                       170,988   166,808      157,123     183,400      114,089      182,897      975,305

Six months ended
30 September 2002

Product                        48,990   121,027      167,698     118,059       36,705      183,278      675,757
Managed services*              42,677    31,692       25,587      34,415       41,855        6,076      182,302
Professional services          45,724    41,180       14,903      19,903       11,911       53,467      187,088
Group                         137,391   193,899      208,188     172,377       90,471      242,821    1,045,147



*    Being process driven revenues of a recurring nature.

**  Excludes Investment holding and management and Protocol.





Currency



The following table reflects the average and period end exchange rates against
the US dollar of SA Rand, Australian Dollar, Sterling and Euro:


                             Six months                    Six months       Six months               Year
                               ended                         ended            ended                 ended
                              31 March                   30 September       31 March            30 September
                                2003                          2002             2002                  2002

                           Average    Period                 Average     Average   Period     Average     Period
Currency                                 end                                          end                    end
South African
Rand                         8.734     8.015                  10.039      11.107   11.335      10.606     10.560
Australian Dollar            1.739     1.666                   1.786       1.935    1.874       1.850      1.841
Sterling                     0.633     0.635                   0.628       0.697    0.701       0.664      0.641
Euro                         0.961     0.926                   0.975       1.136    1.149       1.059      1.019





Key points



•         Focus on cash management and significant achievements in this regard
          in regions of poor profit performance.

•         Raised $100 million by way of a 5.375% 2009 unsecured convertible
          bond.

•         Settled 2002 convertible debentures of $100 million and settled
          substantially all acquisition vendor liabilities.

•         Continued investment in strategy execution.

•         Dollar weakness against major trading currencies.





Chairman's Commentary



The past year has required a high degree of internal focus.  We have carefully
evaluated how the Group operates and how it delivers to all stakeholders.
Dimension Data's key differentiator in these difficult markets is its ability to
provide cost effective Application Network solutions to a global client base
across its global footprint. The development of solutions which transcend
geographic boundaries is paramount in achieving this end. In addition to
continued progress in our global disciplines, we have integrated businesses
across different regions, improved our business models and realigned reporting
structures.



It is now time to sharpen the external focus.  Our clients are demanding
ever-higher returns on their investments and are therefore looking for effective
integrated solutions that can achieve those returns.  Our mandate is to deliver
those solutions and to ensure we become invaluable to our clients in the
process.



To achieve this, we have become more pro-active in our engagement with clients.
We have enhanced our sales approach and we continue to develop long-standing
relationships with suppliers and value-enhancing partnerships at all levels.
Simply put, we are focusing on the fundamentals of doing good business.



However, in tough markets it is imperative to do things better than our
competitors. We have an extensive global footprint that enables us to offer an
integrated service. We have experienced teams across the business, which allow
for the cross-utilisation of skills from different regions, ensuring that we can
deliver the most efficient and cost-effective solutions to our clients. We also
have dedicated resources to accelerate the roll out of solutions and services to
our global client base.



We have managed to secure several high-level contracts such as those detailed in
the regional reviews.  Although the recent wins are evidence of the continued
success of our global offering, we have stated in the past that our renewed
focus on tangible change and transforming to a fully-fledged Application Network
services and solutions group will not flow through to improved results
immediately.



In the period under review, we reported an operating loss before goodwill
amortisation and exceptional items.  This was disappointing for all of us, and
was due in the main to pressures in the US and Asian operations, as outlined in
our trading statement in March 2003. However, we are confident that measures
which are being taken in both of these businesses will ensure that they return
to an acceptable level of profitability.  All other regions performed
satisfactorily.



Our cash position remains favourable and provides the Group with the opportunity
to introduce new solutions offerings to the market place.



Going forward, our challenge is to continue to work harder and smarter to return
loss making operations to profitability, increase client penetration, grow sales
and margins and enhance the value of our proprietary technology and brands.



Markets look set to remain tough and we will continue to align our cost base to
match economic conditions, if necessary.  Despite these external pressures, we
must continue the momentum of change throughout the Group to effect tangible and
sustainable results.



Enquiries:



Dimension Data Holdings plc
Jeremy Ord, Executive Chairman
Malcolm Rutherford, Group Chief Financial Officer
David Sherriffs, Investor Relations (UK)
Mobile: +(44) 777 185 4177
Office: +(44) 20 7651 7000
David.Sherriffs@uk.didata.com
Bronwyn Goeller, Investor Relations (SA)
Mobile: +(27) 83 296 6910
Office: +(27) 11 575 0000
Bronwyn.Goeller@za.didata.com
Internet address: www.didata.com

Brunswick Group
Tom Buchanan
+(44) 20 7404 5959



Note:

All references to $ are to US$

All references to gross and operating margins are before goodwill amortisation
and exceptional items

H1 2002 refers to the six months ended 31 March 2002

H2 2002 refers to the six months ended 30 September 2002

H1 2003 refers to the six months ended 31 March 2003

H2 2003 refers to the six months ending on 30 September 2003.





OPERATIONAL REVIEW



Operating conditions throughout the Group remained challenging during the
period.  The market was characterised by constrained budgets, incremental
spending in preference to large projects, and continued preference for
enhancing, rather than replacing, existing IT systems.  The uncertain global
economy and geopolitical climate contributed to the general caution with which
our customers are assessing IT spend decisions.



Dimension Data continued to focus on migrating its business mix towards the
provision of  services and solutions, and on enhancing the contribution from
recurring revenues.  Pleasing progress was made in the provision of Managed
Services, and the resilience of operations where Managed Services is a strong
component of the business mix is witness to the importance of this transition.



Our Business Solutions areas - Security, IP Convergence (IPC), Customer
Interactive Solutions (CIS) and Service Provider Solutions (SPS) - are crucial
to maintaining our position as a leading edge Application Network Integrator,
and the strong investment in these focus areas resulted in a pleasing
performance across the Group.  Security solutions grew strongly, particularly in
the area of the Managed Services, reflecting strong customer demand for secure,
trusted and controlled IT environments.  Customer demand for the infrastructure
efficiencies and business opportunities generated by the consolidation of
multi-media IP networks underpinned performance in the IPC area.  CIS revenues
were  robust, particularly in the UK and SA.  Prospects in this area, as
customers seek to retain and increase the value of their customer base through
multiple communication channels, remain good, especially in the area of
facilities and operations outsourcing.  SPS remains a strong contributor to
Group turnover and sales to telecommunications companies and other service
providers accounted for 22% of total turnover.



Africa



Dimension Data's African region recorded an 8% increase in constant currency
revenues for the period, which was a very solid performance in difficult market
conditions, confirming the Group's position as a leader in the South African IT
services market.



Gross margins were 0.7% lower sequentially.  However taking account of the
reallocation of certain personnel costs from fixed overheads to cost of sales,
like-for-like gross margin improved by 0.5% sequentially.



Cost containment was a feature of the period, with SA rand fixed costs down by
3%.  Headcount was down by 10%, reflecting the business's evolution from
discreet business units to a solutions-based operation.



The Group's strategy implementation programme, the 'DD Way' continued to show
dividends and renewed emphasis is being placed on external focus and effective
client engagement.



Black economic empowerment remains an important initiative for the Group in
South Africa and substantial progress continues to be made in achieving the
targets set out by the Group's black empowerment charter. These include new
appointments, partnerships, supplier relationships, internal training and
leadership initiatives aimed at creating representation across all staffing
levels.



Customer wins during the period included;



•      Sappi (a new customer):  a three year, $1.4 million Managed Services
contract for the desktop, server and LAN switching environments.



•      Adcorp Flexible Staffing (an existing customer): a five year, $3.2
million Managed Services contract for the desktop, server and LAN 
switching environments.



•     Macsteel International (a new customer):  a five year, $6.4 million
outsourcing and Insite contract with a locally hosted SAP solution,
international VPN connectivity as well as a hosted calldesk.



•     Standard Bank (an existing customer): a  $3.0 million CIS contract
including Professional and Managed Services.



•     South African Breweries (an existing customer): a three year, $1.4
million Professional Services and Managed Services contract.



Asia



Trading conditions in most countries in which Datacraft Asia operates remained
challenging, with revenues declining by 14% sequentially.  Demand from the
enterprise and telecom service provider sectors was subdued in the face of
continuing economic uncertainties.



The reduction in business volume resulted in a decline in gross margins during
the period.  As a result of actions taken to reduce overcapacity, and the easing
of pricing pressure on product margins, gross margin appears now to have
stabilised.



Strict cost containment was a feature of the period, with overheads being
reduced by 13% and headcount down by 20%. The six months also saw the
rationalisation of some of Datacraft's Cabling and Application businesses.



Across the region, operating performances were mixed.   Reasonable profit
contributions were recorded by India, Thailand, Hong Kong and Taiwan.  Korea and
Japan returned to profitability towards the end of the period.  China, however,
has yet to return to profitability and a further reduction in overheads was
implemented towards the end of the period.  Across the region, there were
encouraging signs in the Solutions area, particularly in Security with strong
revenue growth for the period.



In a difficult market environment, Datacraft continued to focus on working
capital management and the operation generated cash during the period.



Visibility across the business remains limited, and it is difficult to predict
the impact of SARS on the operations in certain regions, notably China, Hong
Kong, Taiwan and Singapore.  Datacraft will stay focused on growing its
Solutions and Services and on improving margins through productivity improvement
and cost controls.





Customer wins during the period included:



•       State Bank of India (an existing customer):  a one year, $17.0 million
contract for the second phase of its network expansion.  Datacraft India is the
key systems integration partner responsible for all Professional and Managed
Services for SBI and its seven associated banks.



•       Major service provider in Korea (a new customer):  a five month, $1.2
million iBoss contract to build an integrated AAA (Authentication, Authorisation
and Accounting) system that will secure and manage all user access to the
customer's ADSL and WLAN networks.



•       Federal Bank of India (a new customer):  a multi month, $1.0 million
project to set up a high speed network connecting the bank and its 140 branches,
including the provision of Professional Services and a three year Uptime
contract.



•       A global financial institution (an existing customer):  a one year, $1.6
million Uptime contract covering the customer's network in Japan and five
countries in Asia Pacific.



•       TT&T (an existing customer):  a one year, $2.0 million contract for
network expansion including Professional and Managed Services.





Australia



Sequential comparison of Australian revenues is made difficult by the
traditional seasonality of the business, as well as the inclusion in H2 2002 of
approximately $15.0 million of Microsoft software license upgrades at low
margin.  Compared to H1 2002, revenues from the Network Integration business
declined by 6%, and revenues from the distribution business, Express Data,
declined by 12%.



Dimension Data maintained its market leadership position in Australia.  The
focus continued to be on improving the contribution from Solution areas such as
CIS, Security and SPS, and ensuring the transition towards Managed and
Professional Services.



The overall gross margin improved sequentially, although it was lower than H1
2002.  This reflected the stabilisation of product pricing pressure and an
improved mix of higher value-added services relative to the prior period.



A sharp focus on cost containment saw fixed overheads reduce by 18% in constant
currency.



Customer wins during the period included:



•       A large finance company (an existing customer):  a one year, $2.1
million Managed Services and Professional Services contract, including
connectivity and Security solutions.



•       North West and New England Broadband Telecommunications Network (a new
customer):  a multi year, $6.6 million Professional Services and Managed
Services project to develop a high speed broadband service to deliver voice,
data and video for health and education services.



•       A major insurance company (an existing customer):  a three year, $0.4
million CIS contract to provide Professional and Managed Services.



•       A pharmaceutical manufacturer (an existing customer):  a $0.4 million
contract to enhance and expand a previously supplied Storage solution.



•       Boral Ltd (an existing customer):  a three year, multi million dollar
contract.  Dimension Data have been appointed as Boral's Microsoft Large Account
Reseller.





Europe



The Group's Continental European region recorded a solid performance for the
period, despite subdued market conditions, with constant currency revenues
improving by 5% sequentially.



Although pressures on product margins continued to be evident in some countries,
particularly Germany and France, conditions in the rest of Europe appear to have
stabilised.



Within the region, Belgium, Luxembourg, the Netherlands, Italy, Sweden and Spain
all recorded pleasing performances, particularly in the Solution areas of IPC
and Security.  Germany was less robust, reflecting a generally weak macro
economic environment over the period, strong competition and pricing pressures.



The DD Way initiative - and the imperative to increase the contribution from
Managed Services and Professional Services - continues to be a central thrust
across all countries.  Furthermore, with the Continental European operation's
established centres of excellence, the region is well placed to benefit from the
development of tailored solutions for targeted industry verticals across the
region.



Customer wins included:



•       Belgacom Mobile (a new client): a one year, $0.5 million, CIS contract
to deliver a complex routing multimedia solution across a virtual contact centre
operating more than 800 agents.

•       NMBS, Belgium's national railway company (a new client):  a $5.7 million
contract to provide network infrastructure support.

•       Sudwestrundfunk (SWR), a major German TV and radio broadcaster (an
existing client): a three year $1.2 million Managed Services contract to provide
systems and network management.

•       Leading global logistics company (an existing customer): one year multi
million dollar CIS contract for the integration and efficient management of its
EMEA contact centres.

•       A leading car manufacturer (a new customer): the latest phase in an
ongoing multi million dollar contract to launch an e-business channel throughout
Europe.

•       Telefonica Deutschland, Germany's largest independent IP Carrier (an
existing customer): an IPC contract in excess of $1.2 million to enhance
Telefonica's converged voice services.



United Kingdom



In the UK, overall constant currency revenues increased by 27%, reflecting a
very good performance from the Network Integration business in tight market
conditions.



These results reflect the benefits of the changes implemented in the prior
period, with a new management team focused on enhancing the sale of services and
solutions, on maintaining and expanding the customer base, and on improving the
contribution from recurring revenues and Managed Services.  The business has
seen growth in its Solutions offerings, and its focus on Professional and
Managed Services has been rewarded with good revenue growth in these areas.



The gross margin over the period was lower than that for H2 2002.  This resulted
from a re-allocation in the current year of certain personnel costs from fixed
overheads to cost of sales, as well as the higher proportion of revenues derived
from FMT - the UK's mobile switching technology offering.



The Group's call centre business, The Merchants Group, recorded slightly lower
revenues for the period, although the outlook for this business is encouraging
due to a number of recent wins.



The emphasis in the second half will remain on managing and growing the customer
base - both in its traditional sectors (financial services, telecommunications
and media) and in areas such as the public sector where there are expected to be
significant opportunities - as well as on improving the contribution from
Managed and Professional Services.



Customer wins during the period included:



•       A leading international financial services company (a new customer):
three year, multi million dollar contract to procure and support networking
technology to all the company's offices outside the US.



•       A global leader in oilfield services (a new customer):  a multi million
dollar Professional Services contract establishing a converged IP infrastructure
for the roll out of an IPC solution at its new European headquarters in
Scotland.



•       Manchester United (an existing customer):  secured approval for second
phase of a three year, multi million dollar contract to implement a CRM
programme.



•       A global reinsurance company (a new customer): a one year, $3.9 million
network infrastructure contract for new landmark headquarters building in the
City of London.

•       David McLean Group (a long term customer):  a six month, $3.9 million
project to undertake the design and installation of all the IT, voice, fire
alarm and security infrastructure for Liverpool Grand Station student
accommodation.



United States



Continued difficult trading conditions for the Group's US region resulted in a
25% decline in revenues and an operating loss for the period.   This decline in
revenues reflected revenue contractions in both our Network Integration and
Application divisions, as well as the impact of the sale of the training
business on 1 October 2002.



The Network Integration business was particularly affected, with overall
revenues declining sequentially by 24%.  This decline was due mainly to New York
where reliance on the financial services sector saw significant reductions in
volume.  Other territories - the South-East, Washington and Boston - saw
stabilisation in revenues.  The challenging market conditions forced further
consolidation and rationalisation in the competitive landscape in the US during
the period.



At the revenue line, despite some encouraging customer wins, the Application
business was also impacted, particularly in the second quarter of the year.
Nonetheless, this business made a small profit for the period following a
successful turnaround plan that was implemented in the second half of last year.
This is pleasing given the substantial losses last year.



Product gross margins were still under pressure, but showed signs of stabilising
relative to the prior period.  Gross margin on services in the Network
Integration business was severely impacted by pricing pressures flowing from the
rapid commoditisation of project based services in the US, as well as
under-utilisation of capacity.  Conversely, Managed Services offerings showed
good growth during the period.



The Group took further steps to rationalise the Network Integration business and
has been restructuring its services delivery model to bring costs more in line
with market conditions.   Overall headcount declined by 23% and fixed costs by
20%.  Working capital improvements resulted in the operation being cash
generative for the period.



In the second half of the financial year, the focus of the US region will be on
managing the cost base to match sustainable revenue levels, as well as on
continuing to transition towards more resilient, value-added services and
solutions. Access to lower cost offshore delivery capabilities elsewhere in the
Group is a key opportunity, and underlines the strength of the Group's global
model.



Customer wins during the period included:



•       A large retail drug chain (an existing client):  a multi million dollar
back-up and recovery (business continuity) Professional Services and Managed
Services contract, including high availability storage.



•       A global finance company (an existing client):  a three year, multi
million dollar contract to design, develop, host, deploy, and maintain the
company Website.



•       A food industry conglomerate (an existing customer):  a five year, $7.0
million Managed Services contract.



•       Travel Planners Inc (an existing customer):  a one year, $0.5 million
Professional Services and Managed Services contract around Travel Planners'
online presence.



•       A large financial institution (an existing customer):  a $4.0 million
connectivity solution including mainly Professional Services and procurement.







FINANCIAL REVIEW



Introduction



Dimension Data is listed on the London Stock Exchange and the JSE Securities
Exchange and is required to comply with UK reporting requirements.



The accounting policies used in the preparation of the March 2003 financial
statements are consistent with those applied previously.  All comparisons of
profit and loss items discussed in this review are sequential changes between H2
2002 and H1 2003, unless otherwise indicated.



Group Operating Performance



Turnover



Total turnover including associates was $1,012.5 million (H2 2002: $1,085.3
million).  There were no major changes in the geographical mix of turnover.  The
weakness of the US dollar against the basket of other currencies in our
territories was significant.  For example, the average rate sequential
depreciation of the dollar against the SA rand was 13%.



The Group's migration towards the provision of solutions and services in the
Application Networks space has continued.  The success of this strategy and the
manner in which we go-to-market is evidenced by the improvement in Managed
Services in most regions.



Gross margin



Market pressures on pricing of product and associated services make it
misleading to look at turnover as the only measure of progress towards a
solutions based approach.  Consideration has to be given to the gross margin
contribution in each region.  Like-for-like gross margin improved by 0.4%
sequentially.



Overheads



Fixed overheads excluding associates were $202.9 million.  Overhead cost savings
of $17.2 million and the reallocation of certain personnel costs of $10.5
million to cost of sales, were partly offset by currency translation differences
of $10.9 million.



Fixed overheads do not, however, reflect the Group's total cost base.  Included
in cost of sales is a personnel cost of $112.0 million (headcount of 5,351) and
infrastructure costs of $20.9 million.  These have also been subject to
rationalisation programmes, where headcount was reduced by 7.5%.



The Group continues to invest in the execution of its strategy.  In the current
period the Group expensed $10.9 million relating to Services and Solutions
development, which is an increase of $3.5 million sequentially.



Taxation



Whilst the Group reported an overall loss before goodwill amortisation and
exceptional items, certain territories in which the Group operates reported
profits. As a consequence the Group recorded an overall tax charge of $6.4
million (excluding exceptional items).



The Group has significant deferred tax assets, the majority of which are not
recognised within the Group financial statements on the basis that their
recoverability cannot be forecast with sufficient certainty to meet the
recognition criteria under FRS 19. However, the Group has recognised deferred
tax assets with respect to tax losses on timing differences where the Group
considers that it is more likely than not that these assets can be recovered
within the foreseeable future.  To the extent that deferred tax assets have not
been provided, available tax losses will have a positive effect on the Group's
effective tax rate in the future.



Goodwill



Goodwill amortisation amounted to $166.6 million in H1 2003 compared to $336.8
million in H2 2002. The decrease is due to the significant decline in the
goodwill balance resulting from impairments in the 2001 and 2002 financial years
and some earlier goodwill has exhausted itself.  Impairment reviews performed
indicated no requirement for further impairment in the current period.



Operating exceptional items



Costs incurred in restructuring and downsizing resulting from deteriorating
economic conditions, are treated as exceptional.  Costs incurred to improve
efficiencies and to accommodate the Group's go-to-market model, are borne within
normal trading operations.



Operating exceptional costs relate to severance and other associated costs of
$3.3 million in Datacraft and $2.6 million in the US.  An amount of $0.6 million
has been written off capital assets in Datacraft.



Liquidity and Capital Resources



Cash at bank and in hand was $292.0 million at 31 March 2003.



For the period there was a net cash outflow from operating activities of $42.2
million driven primarily by a decline in creditors of $70.1 million.  Creditors
days have reduced as our mix of suppliers changes and creditors are less
flexible on the imposition of terms. Furthermore, creditors at year end contain
certain accruals which are not as significant at half year.



It is not uncommon for the Group to experience higher working capital
requirements in the first half of the year than in the second.  For example, in
FY 2002 the Group converted a cash outflow in the first half of the year of
$74.6 million to a cash inflow for the full year of $29.0 million.  We expect a
similar dynamic this year.



There remain $9.0 million of vendor liabilities, of which $6 million is to be
paid by year end.



During the period the $100 million 2002 convertible debentures were redeemed.  A
$100 million convertible bond bearing a coupon of 5.375% and repayable in 2009
was issued in the period.



Capital reduction



The capital reduction referred to in the 2002 Annual Report and Notice of Annual
General Meeting became effective on 20 March 2003. The share premium account was
reduced by an amount of $4,334.1 million, which was applied to eliminate the
deficit on the Company's profit and loss account at 30 September 2002.  The
share premium account was further reduced by an amount of $342.4 million to
create a special reserve.  This amount is available to be applied against any
goodwill amortisation and impairment charges charged in the Group consolidated
profit and loss account.  An amount of $166.6 million has been applied against
the goodwill amortisation charge for the period ended 31 March 2003.  The
Company must also credit to the special reserve any distribution from a company
which was a subsidiary at the effective date of profits earned prior to 1
October 2002.  The special reserve is not available for distribution unless all
creditors whose debts or claims were outstanding at the effective date, unless
such creditors have consented otherwise, are adequately protected.





CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 31 March 2003

                      Note       Unaudited          Unaudited          Unaudited          Unaudited            Audited
                                Six months         Six months         Six months         Six months               Year
                                     ended              ended              ended              ended              ended
                                  31 March           31 March           31 March           31 March       30 September
                                      2003               2003               2003               2002               2002
                                      Pre-        Exceptional                                                         
                               exceptional     items (Note 1)              Total              Total              Total
                                     $'000              $'000              $'000              $'000              $'000
  Turnover                                                                                                            
  Group turnover                   977,818                  -            977,818          1,075,415          2,120,562
  Associates                        34,693                  -             34,693             26,593             66,769
                                 ---------          ---------          ---------         ----------         ----------
  Total turnover                 1,012,511                  -          1,012,511          1,102,008          2,187,331
                                 =========          =========          =========          =========          =========
  Operating                                                                                                           
  (loss)/profit                                                                                                       
  before                                                                                                              
  goodwill                                                                                                            
  amortisation,                                                                                                       
  impairment                                                                                                          
  and exceptional                  
  items                            (7,039)                  -            (7,039)             38,081             40,962  
  Exceptional                            
  operating costs                        -            (6,543)            (6,543)           (30,767)           (60,251)  
                                 ---------          ---------          ---------         ----------         ----------
                                   (7,039)            (6,543)           (13,582)              7,314           (19,289)
  Goodwill                      
  amortisation                   (166,585)                  -          (166,585)          (383,136)          (719,949)  
  Goodwill and                                                                                                        
  investment                                                                                                          
  impairment                             -            (7,768)            (7,768)          (320,525)        (1,805,705)
                                 ---------          ---------          ---------         ----------         ----------
  Group operating               
  loss                           (173,624)           (14,311)          (187,935)          (696,347)        (2,544,943)  
  Share of                                                                                                            
  operating profit                                                                                                    
  in associates                      2,536                  -              2,536              2,192              4,464
  Goodwill                                                                                                            
  amortisation and                                                                                                    
  impairment -                     
  associates                       (1,613)                  -            (1,613)            (2,047)           (43,142)  
                                 ---------          ---------          ---------         ----------         ----------
  Total operating                
  loss                           (172,701)           (14,311)          (187,012)          (696,202)        (2,583,621)  
  (Loss)/profit on                                                                                                    
  sale of fixed                                                                                                       
  assets and           
  investments          1                 -            (8,562)            (8,562)                450                366  
                                 ---------          ---------          ---------         ----------         ----------
  Loss on ordinary                                                                                                    
  activities                                                                                                          
  before interest                (172,701)           (22,873)          (195,574)          (695,752)        (2,583,255)
  Investment income                  2,186                  -              2,186                521              1,340
  Net interest                                                                                                        
  (payable)/receivable             (1,224)                  -            (1,224)              1,958              2,604
                                 ---------          ---------          ---------         ----------         ----------
  Loss on ordinary                                                                                                    
  activities                                                                                                          
  before taxation                (171,739)           (22,873)          (194,612)          (693,273)        (2,579,311)
  Tax on loss on                                                                                                      
  ordinary             
  activities           2           (6,444)                654            (5,790)            (7,889)           (11,111)  
                                 ---------          ---------          ---------         ----------         ----------
  Loss on ordinary                                                                                                    
  activities                                                                                                          
  after taxation                 (178,183)           (22,219)          (200,402)          (701,162)        (2,590,422)
  Equity minority                    
  interests                          3,654              1,895              5,549              4,981              6,532  
                                                                              
                                 ---------          ---------          ---------         ----------         ----------
  Loss for the                   
  period                         (174,529)           (20,324)          (194,853)          (696,181)        (2,583,890)  
                                                                                  
                                 =========          =========          =========          =========          =========



  (Loss)/earnings                                                       US cents           US cents           US cents
  per share                                                                                                           
  Basic                                                                                                               
  (loss)/earnings                                                                                                     
  before                                                                                                              
  goodwill                                                                                                            
  amortisation and                                                                                                    
  exceptional items                                                                                                   
  per                                                                                                                 
  ordinary share       3                                                   (0.5)                2.0                2.3
  Basic loss per       
  ordinary share       3                                                  (14.5)             (53.6)            (198.9)  
                                                                                            



CONSOLIDATED BALANCE SHEET

as at 31 March 2003


                                                           Unaudited         Unaudited               Audited
                                                            31 March          31 March          30 September
                                                                2003              2002                  2002
                                                               $'000             $'000                 $'000
Fixed assets
Intangible assets                                            167,728         2,122,700               342,439
Tangible assets                                              108,790           113,966               105,380
Investments in associates                                     34,809            20,905                26,016
Other investments                                             34,158            19,486                30,343
                                                             345,485         2,277,057               504,178
Current assets
Stock                                                         92,733           101,889                99,100
Debtors                                                      555,739           636,025               565,236
Short term investments                                        15,105             8,150                42,786
Cash at bank and in hand                                     292,005           622,063               372,566
                                                             955,582         1,368,127             1,079,688

Creditors: amounts falling
due within one year                                        (531,977)       (1,024,388)             (737,026)
Net current assets                                           423,605           343,739               342,662
Total assets less current liabilities                        769,090         2,620,796               846,840

Creditors:  amounts falling due after
more than one year                                         (123,792)                 -              (17,045)
Provisions for liabilities and charges                      (41,177)          (29,708)              (88,223)
Equity minority interests                                   (99,750)          (94,964)             (102,259)
Total net assets                                             504,371         2,496,124               639,313

Capital and reserves
Equity shareholders' funds                                   504,371         2,496,124               639,313





CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 31 March 2003


                                                        Unaudited          Unaudited               Audited
                                                       Six months         Six months            Year ended
                                                            ended              ended
                                                         31 March           31 March          30 September
                                                             2003               2002                  2002
                                                            $'000              $'000                 $'000

Group operating loss                                    (187,935)          (696,347)           (2,544,943)
Depreciation                                               24,193             24,170                48,277
Goodwill amortisation and impairment
and investment impairment                                 174,353            703,661             2,525,654
Loss on sale of tangible fixed assets                       1,388                  -                 8,956
Decrease in stock                                           4,935                622                 3,411
Decrease in debtors                                        12,579             80,024               169,754
Decrease in creditors                                    (70,115)          (187,096)             (184,483)
Other non-cash items                                      (1,630)                371                 2,326

Net cash (outflow)/inflow from
operating activities                                     (42,232)           (74,595)                28,952

Returns on investments and
servicing of finance                                        2,288              3,087                 5,156
Taxation                                                 (15,118)           (16,327)              (34,134)
Capital expenditure and
financial investment                                     (20,529)           (10,291)              (68,948)
Acquisitions and disposals                               (65,965)          (136,598)             (173,516)
Cash outflow before use
of liquid resources and financing                       (141,556)          (234,724)             (242,490)
Management of liquid resources                             29,033             13,283              (20,884)
Financing                                                 (1,367)                 84             (217,358)
Decrease in cash in the period                          (113,890)          (221,357)             (480,732)

Reconciliation of net cash flow to
movement in net cash:
Decrease in cash in the period                          (113,890)          (221,357)             (480,732)
Cash outflow from decrease in debt                          1,367                  -               217,435
Cash (inflow)/outflow from
(decrease)/increase in liquid resources                  (29,033)           (13,283)                20,884
Change in net cash resulting
from cash flows                                         (141,556)          (234,640)             (242,413)
Non-cash movement in debt                                 (1,377)              (749)               (1,498)
Translation difference                                     31,390           (50,027)              (25,336)
Movement in net cash for the period                     (111,543)          (285,416)             (269,247)
Net cash at beginning of the period                       294,772            564,019               564,019
Net cash at end of the period                             183,229            278,603               294,772

Analysis of net cash:
Cash at bank and in hand                                  292,005            622,063               372,566
Bank overdraft                                               (89)           (22,500)               (2,168)
Debt due within one year                                        -          (329,110)             (101,367)
Debt due more than five years                           (123,792)                  -              (17,045)
Short term investments                                     15,105              8,150                42,786
Total                                                     183,229            278,603               294,772





CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

for the six months ended 31 March 2003


                                                        Unaudited           Unaudited               Audited
                                                       Six months          Six months            Year ended
                                                            ended               ended
                                                         31 March            31 March          30 September
                                                             2003                2002                  2002
                                                            $'000               $'000                 $'000

Loss for the period                                     (194,853)           (696,181)           (2,583,890)
Currency translation differences
on foreign currency net
investments                                                46,117            (50,876)              (20,700)
Total recognised losses
relating to the period                                  (148,736)           (747,057)           (2,604,590)







1. EXCEPTIONAL ITEMS


                                                               Unaudited          Unaudited            Audited
                                                              Six months         Six months
                                                                   ended              ended         Year ended
                                                                31 March           31 March       30 September
                                                     Note           2003               2002               2002
                                                                   $'000              $'000              $'000

Exceptional operating costs
Severance and other associated costs                  a)         (5,894)           (12,447)           (30,374)
Write-off of capital assets                           b)           (649)            (3,320)            (4,976)
Other                                                 c)               -           (15,000)           (24,901)
                                                                 (6,543)           (30,767)           (60,251)
Investments written down and impairment
of goodwill (including associates)                    d)         (7,768)          (320,525)        (1,844,516)
Total exceptional operating costs                               (14,311)          (351,292)        (1,904,767)


Other exceptional items
(Loss)/profit on sale of fixed assets and
investments                                           e)         (8,562)                450                366
Total other exceptional items                                    (8,562)                450                366


Total exceptional items before taxation
and equity minority interests                                   (22,873)          (350,842)        (1,904,401)





a)   Costs incurred on restructuring and downsizing the businesses in Asia and 
     the US.

b)   Datacraft has written off certain fixed assets as a result
     of the restructuring exercise undertaken.

c)   In the period ended 31 March 2002  'Other' related to
     Datacraft provisions of $15.0 million.  In the year ended 30 September 
     2002 ' Other' related to Datacraft provisions of  $17.9 million, onerous 
     lease expenses of $5.9 million and impairment of own shares of 
     $1.1 million.

d)   Asset impairment loss arising from the rationalization of
     Datacraft's Cabling and i-commerce businesses.

e)   Loss on disposal of Colorado Computer Training Institute,
     effective 1 October 2002.




                                                            Unaudited            Unaudited              Audited
                                                           Six months           Six months
                                                                ended                ended           Year ended
                                                             31 March             31 March         30 September
Regional analysis of exceptional                                 2003                 2002                 2002
operating costs                                                 $'000                $'000                $'000

Africa                                                              -                    -               10,726
Asia                                                            3,935               21,676               25,619
Australia                                                           -                  348                1,348
Continental Europe                                                  -                    -                4,952
United Kingdom                                                      -                6,612                7,456
United States                                                   2,608                2,131                8,490
Investment holding and management                                   -                    -                1,660
Total exceptional operating costs                               6,543               30,767               60,251





2. TAX ON LOSS ON ORDINARY ACTIVITIES


                                          Unaudited        Unaudited       Unaudited       Unaudited         Audited
                                         Six months       Six months      Six months      Six months
                                              ended            ended           ended           ended      Year ended
                                           31 March         31 March        31 March        31 March    30 September
                                               2003             2003            2003            2002            2002
                                               Pre-      Exceptional
                                        exceptional            items           Total           Total           Total
                                              $'000            $'000           $'000           $'000           $'000

Payable in respect of the current
period (including associates)                 6,517            (654)           5,863           8,230          11,121
Adjustments to prior years'
tax provision                                  (73)                -            (73)           (341)            (10)
                                              6,444            (654)           5,790           7,889          11,111






3. (LOSS)/EARNINGS PER ORDINARY SHARE


                                                                 Unaudited          Unaudited             Audited
                                                                Six months         Six months
                                                                     ended              ended          Year ended
                                                                  31 March           31 March        30 September
                                                                      2003               2002                2002
                                                                     $'000              $'000               $'000

(Loss)/earnings before goodwill amortisation
and exceptional items                                              (6,331)             26,571              30,100
Exceptional items (net of tax and minorities)                     (20,324)          (337,569)         (1,889,710)
Goodwill amortisation                                            (168,198)          (385,183)           (724,280)
Loss for the period                                              (194,853)          (696,181)         (2,583,890)

                                                                      '000               '000                '000

Weighted average number of ordinary shares                       1,341,239          1,298,884           1,299,075

                                                                  US Cents           US Cents            US Cents

Basic (loss)/earnings per ordinary share before
goodwill amortisation and exceptional items                          (0.5)                2.0                 2.3
Basis loss per ordinary share on exceptional items                   (1.5)             (26.0)             (145.5)
Basic loss per ordinary share on goodwill amortisation              (12.5)             (29.6)              (55.7)
Basic loss per ordinary share                                       (14.5)             (53.6)             (198.9)





4.         BASIS OF PREPARATION



Statutory financial information



The unaudited interim results have been prepared on a basis consistent with the
accounting policies set out in the Dimension Data Holdings plc Annual Report and
Accounts for the year ended 30 September 2002.  The interim results should
therefore be read in conjunction with the 2002 Annual Report and Accounts.



The interim results for the six months to 31 March 2003, which were approved by
the Board of Directors on 13 May 2003, do not comprise statutory accounts within
the meaning of section 240 of the Companies Act 1985.  Full accounts for the
year ended 30 September 2002, incorporating an unqualified auditors' report,
have been filed with the Registrar of Companies.



5.         Copies of this report are being sent to shareholders, and are
available to the public at the Company's registered office, Fleet Place House, 2
Fleet Place, London EC4M 7RT.





INDEPENDENT REVIEW REPORT BY DELOITTE & TOUCHE TO DIMENSION DATA HOLDINGS plc



Introduction



We have been instructed by the Company to review the financial information for
the six months ended 31 March 2003 which comprises the consolidated profit and
loss account, the consolidated balance sheet, the consolidated cash flow
statement, the consolidated statement of total recognised gains and losses and
related notes 1 to 4.  We have read the other information contained in the
Interim Report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.



This report is made solely to the Company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board.  Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the Company, for our review work, for this report, or for the conclusions we
have formed.



Directors' Responsibilities



The Interim Report, including the financial information contained therein, is
the responsibility of, and has been approved by the Directors.  The Directors
are responsible for preparing the Interim Report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.



Review work performed



We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom.  A review
consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed.  A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions.  It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit.  Accordingly, we do not
express an audit opinion on the financial information.



Review Conclusion



On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2003.



Deloitte & Touche

Chartered Accountants



13 May 2003


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