Datatec interim profit slides
Datatec, the listed ICT group, has reported a drop in operating profit to $67 million for the six months ended August 2013, from $71 million before, with anticipated growth in the US failing to materialize.
Group revenue however, climbed 6% to $2.77 billion, from $2.62 billion before, but Datatec’s underlying earnings per share of 19.2 US cents was worse than 23.5 US cents in the prior period.
The group’s ebitda also slipped to $89.2 million, from $91.9 million, but Datatec maintained its interim dividend at 8 US cents per share.
Jens Montanana, chief executive of Datatec, said: “Performance in parts of Westcon’s North American business, where the new ERP system has been implemented, has been disappointing. The volume shortfall in that region has been the main reason for the Group’s under-performance in the Period.”
“Logicalis continues to execute strongly and in line with our expectations; Analysys Mason has also performed well.”
“We are experiencing varying trading conditions in many parts of the world with Europe recently showing signs of improvement, while developing markets have been impacted by currency volatility.”
The company lead said that confidence in the group’s long term strategy has enabled it to maintain the interim dividend.
Datatec said that operations in the rest of the world outside North America and Europe now generates 39% of it’s revenues and 44% of the group’s gross profits, compared with 35% of revenue and 41% of gross profits in the comparative period.
It noted that 27% of group revenue is generated from North America, from 34% before, 34% is from Europe (31%), 18% from Latin America (14%), 11% from Asia Pacific (13%) and 10% from Africa, India and Middle East (8%).
Westcon
Westcon, Datatec’s distributor of networking, security, mobility and convergence for technology vendors, accounted for 71% of the group’s revenues (73%) and 50% of its Ebitda (63%).
Overall revenues increased 3% to $1.96 billion,but ebitda decreased to $45.7 million, from $62.1 million.
Logicalis
Logicalis, Datatec’s IT solutions and managed services provider, accounted for 28% of the group’s revenues (26%) and 48% of its ebitda (35%).
Logicalis delivered another very strong performance, with operating profit up 45% to $32.7 million, while revenue increased by 12% to $767.3 million.
Looking ahead, Datatec said it expects a cautious outlook for second half of FY14 in light of Westcon’s performance.
However, the group revised its 2014 financial year forecast with revenues anticipated to be between $5.6 billion and $5.8 billion, from $5.25 billion before.
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