Datatec weathering economic storm

Subsidiary Westcon's developed market businesses are under pressure, but Logicalis and Consulting Services have been performing "relatively robustly".

Jens Montanana

Despite slowing growth as a result of a weakening economic environment, JSE-listed technology group Datatec says it is still on target to meet its full-year growth forecasts.

The group on Wednesday published an interim management statement covering the four-month period between 1 March and 30 June 2012, in which it said its trading and underlying earnings are continuing to improve in spite of problems in the euro zone, which it says are spreading globally.

It says that during the four-month period, group revenues improved across all its divisions compared to a year ago. However, gross margins have “come under some pressure”, particularly affecting subsidiary Westcon in developed markets.

Its Logicalis and Consulting Services divisions performed “relatively robustly”.

“Westcon has reported revenue growth across all regions, but has had a relatively challenging start to the year compared to the recent past,” the group says. “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.”

“Although the outlook has become more uncertain, the defensive nature of our business model continues to be a strong asset,” says Datatec CEO Jens Montanana.

On 16 May, Datatec published forecasts for the financial year ending 28 February 2013, in which it said it expected revenues of between US$5,5bn and $5,8bn and headline earnings per share of about $0,50.

The Group expects to release its interim results for the six months ending 31 August 2012 on 17 October.  — (c) 2012 NewsCentral Media