Redington (REDINGTON) Q4 06/07 earnings summary

Executive summary

• FY07 consolidated revenue rose 33.47% to Rs 9,067.14 crore and PAT rose 36.80% to Rs 101.70 crore; EBITDA increased 51.44% to Rs 198.47 crore.

• International operations contributed 48% of consolidated revenue and 56% of consolidated earnings; operations spanned 20 countries across South Asia, the Middle East, Africa and Singapore.

• Strategy shifted beyond IT distribution toward end-to-end supply-chain solutions, services and non-IT products, including telecom, gaming, digital lifestyle and consumer durables.

Financial highlights

• Consolidated sales and service income was Rs 9,061.39 crore versus Rs 6,790.57 crore; total revenue was Rs 9,067.14 crore versus Rs 6,793.56 crore.

• Consolidated PBT was Rs 127.25 crore versus Rs 92.36 crore; PAT was Rs 101.70 crore versus Rs 74.34 crore.

• Standalone revenue was Rs 4,717.53 crore versus Rs 3,695.51 crore; PAT was Rs 42.42 crore versus Rs 29.14 crore.

• Consolidated interest expense rose to Rs 57.94 crore from Rs 36.13 crore, reflecting higher working-capital borrowing and interest rates; depreciation rose to Rs 13.28 crore, partly due to capitalized ERP software.

Outlook and guidance

• Growth momentum was expected to continue with IT/ITES expansion and further evolution of supply-chain solutions; management noted potential temporary weakness in some sectors.

• Non-IT products and services were expected to gain share over time; planned expansion included telecom repair, digital printing, gaming, digital lifestyle and consumer durables.

• Four automated distribution centres were planned in Indian metros and one in Dubai; Chennai land purchase had begun, and an LCD panel repair facility was targeted to open in Q2 FY08.