Datatec grows in tough market
The JSE-listed multinational IT group has reported an increase in headline earnings and revenue despite a weakening global economy.
Johannesburg- and London-listed technology distribution and services group Datatec has grown diluted headline earnings per share by 6,8% in the six months ended 31 August 2012 on the back of a 7% rise in revenue to $2,62bn.
Describing the results as “solid” in a “weak environment”, the group lifted gross margin to 14,4% from 14,1% in the same six month period a year ago and increased its dividend by 14% to $0,08/share, up a cent from a year ago.
It says growth slowed because of the “weakening economic climate” but that it continues to benefit from business and international diversification, improvement in the business mix and growing annuity income streams.
For the full year to February 2013, Datatec says its forecast of $5,5bn to $5,8bn in revenue and underlying earnings per share of $0,55 remains unchanged.
CEO Jens Montanana says the macroeconomic climate has become more uncertain. “This became more pronounced in the second quarter in all regions, with the exception of Latin America.”
North America remains Datatec’s largest market and, although growth was reported there in the second quarter, it was at a slower rate.
Trading conditions in Europe, and in particular the UK, remained weak but in line with expectations, the group says.
Latin America, Asia Pacific and the Middle East remain the strongest performing markets.
Technology distribution company Westcon remains Datatec’s largest subsidiary, contributing 73% of the group’s revenues in the latest six-month period against 74% a year ago. It also makes up 63% of overall earnings before interest, tax, depreciation and amortisation (Ebitda).
Services company Logicalis accounts for 26% of revenue and 35% of Ebitda, from 25% and 31% respectively a year ago. — (c) 2012 NewsCentral Media