Datatec full-year forecast unchanged
International ICT group Datatec says its trading and underlying earnings continue to improve but, growth is slowing in a weakening economic environment as the fallout of the eurozone economic problems has spread globally.
On Wednesday (18 July), Datatec released its interim management statement for the period March to end-June 2012‚ and said that based on current exchange rates and trading conditions, its forecasts for the financial year remain unchanged.
On 16 May‚ Datatec published forecasts for the financial year ending February 2013‚ for revenue of between $5.5 billion and $5.8 billion‚ profit after tax of approximately $104 million‚ underlying earnings per share of approximately 55 US cents‚ and earnings and headline earnings per share of approximately 50 US cents.
The group noted that gross margins have come under some pressure, particularly within
Westcon in developed markets, but added that both the Logicalis and Consulting Services divisions have performed “relatively robustly”.
From a regional perspective Asia and Latin America remain resilient, Europe is still weak and the US has slowed, the group said.
“Underlying earnings have increased year-on-year, but unrealised foreign exchange losses (versus unrealised gains in the comparative period) have impacted operating profit growth,” Datatec said.
Jens Montanana, CEO said: “The diversity of our business streams and global footprint has once again enabled the group to improve revenues and underlying earnings
in a difficult environment.
“Although the outlook has become more uncertain, the defensive nature
of our business model continues to be a strong asset.”
Westcon
The ICT group said that Westcon has reported revenue growth across all regions, but has had a relatively challenging start to the year compared to the recent past.
Overall gross margins have fallen slightly with margin pressures in Europe and North America outweighing margin expansion in developing market regions, particularly Latin America.
“Operational profitability has not grown in line with revenues in the comparative period, as a result of slightly lower gross margins and the impact of unrealised foreign exchange losses,” Datatec said.
On 2 July 2012 Datatec announced Westcon´s acquisition of Latin American and Iberian multinational security, virtualisation and data centre distributor Afina Group. The deal is expected to be earnings enhancing and expands Westcon’s presence in Latin America, the
Caribbean, Europe, and North Africa.
It also broadens and deepens Westcon’s product portfolio, adding and enhancing relationships with strategic vendors such as VMware, Riverbed, Symantec and Citrix. The
Transaction was settled by the initial payment of EUR30 million in cash and EUR10 million worth of Datatec shares.
Two additional contingent cash payments of up to EUR5 million each will be payable in 2013 and 2014 subject to Afina meeting certain EBITDA performance conditions.
On 16 July 2012 Westcon acquired the Austrian value added security distributor Triple AcceSSS expanding its security business footprint in Europe and strengthening Westcon´s relationships with security vendors such as Trend Micro, F5, Blue Coat and BlueCat.
Logicalis
Datatec pointed out that Logicalis has had a relatively strong start to the year, reporting
overall revenue and operating profit growth over the Comparative Period.
“The UK performance has been good despite weak economic conditions. The US and Asia Pacific regions also reported improvements. Local market challenges in Argentina and the impact of a weaker Brazilian Real have impacted reported results in an otherwise still resilient Latin America,” the group said.
On 1 June 2012 Logicalis acquired Corpnet, a Brisbane-based provider of IT solutions including data centre, cloud and managed services solutions, to the Queensland, Australia mid-sized and enterprise markets. The consideration comprised $2.7 million on completion with an additional potential earn-out payment of $0.6 million.
Consulting Services
The Consulting Services division has continued the improved performance of last year. Increased revenue and profitability at Analysys Mason have outweighed the impact of a more challenging sales environment at both Intact and Via Group.
Datatec expects to release its interim results for the six months to August 2012 on Wednesday‚ October 17.
Related article
Westcon acquires Triple Accesss IT
Westcon acquires Afina for EUR50m
Datatec takes ownership of Westcon Africa
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