Datacraft sees no slowdown in tech spending

Datacraft Asia Ltd, Southeast Asia's largest computer data network builder, said on Friday orders remained robust in the current quarter that and it was in acquisition talks with a handful of Asian firms.

"This quarter, the bookings seem to be pretty robust. Looking at all the headlines, concerns about clients slowing down spending -- there's been no evidence of that so far," Chief Executive Bill Padfield told Reuters in an interview.

Datacraft, a unit of South African information technology group Dimension Data, builds and maintains computer networks for banks, telecommunication and technology firms, who are facing slowing global economic growth.

"We're on track to deliver similar-looking growth to Q1, maybe even a little better," Padfield said. Datacraft reported a 51 percent jump in net profit last month to $9.4 million for its fiscal first quarter ended December, and warned of a seasonally slower quarter in the January-March period. It has an order backlog of $202 million.

Padfield said the company was targeting revenue growth of over 20 percent for the fiscal year ending September 2008.

"We had 20-plus percent growth last year, and we would like to sustain that growth level in FY'08."

Datacraft competes with the services units of Hewlett-Packard Co Ltd, International Business Machines Corp and local rivals DMX Technologies Group Ltd and Frontline Technologies Corp.

ACTIVE PIPELINE

The company has a "handful" of acquisition deals in the pipeline and has set aside $30 million for purchases, he said.

"It's a very active pipeline, we're getting into the detailed numbers, we're getting into disclosures. Valuations are getting a bit more reasonable now. If things go well, we will continue to acquire throughout the year," he added.

The potential targets would boost Datacraft's offerings in security, data centre storage and call centres, as well as in the manufacturing and financial services industries.

But risks of a cutback in technology spending due to the U.S. subprime mortgage crisis and high energy prices remain.

"Financial services is one area open to a potential downturn, but I've been talking to my financial services clients in the last two weeks, and I've not seen any material slowdown -- in some cases, it's the opposite," Padfield said.

He said that many companies had set higher growth and profitability targets for their Asian divisions to compensate for the challenges faced by their U.S. operations, and this had underpinned regional technology spending budgets.

Datacraft will continue to add 25-30 new jobs every quarter to cope with firm demand, Padfield said.

"We had 1,410 permanent staff at the end of Q1 and we're going to add up to 100 heads for full year 2008 -- that's the rough guide."