Datatec reports minimal growth in second half of FY - CNBC Africa

Datatec reports minimal growth in second half of FY

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Group revenue increased from 2.62 billion dollars in the first half of the 2013 financial year to 2.77 billion dollars. The group’s gross margin expanded minimally from 14.4 per cent in the first half to 15 per cent.

“Performance in parts of Westcon's North American business, where the new ERP system has been implemented, has been disappointing,” the group said in a statement.

“The volume shortfall in that region has been the main reason for the group's underperformance in the period.”

Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA)also decreased from 91.9 million dollars to 89.2 million dollars.

[DATA DTC:Datatec] is a global ICT solutions and services group. Its main lines of business comprise of technology division, which includes Westcon, its integration and consulting divisions.  

Operating profit decreased from 71 million in the first half of the financial year to 67 million dollars. Profit before tax also decreased from 60.4 million dollars to 57.7 million dollars.

The group’s Westcon division accounted for 71 per cent of the group's revenues and 50 per cent of its EBITDA.

Westcon is a global leading specialty distributor in networking, security, mobility and convergence for technology vendors including Cisco, Avaya and Check Point.

Logicalis accounted for 28 per cent of the group’s revenues and 48 per cent of its EBITDA.

“Overall revenues and profits in the first half were significantly better than the first half of the previous year. The Latin America region was particularly strong and the performances of the other regions were in line with expectations.”

Logicalis revenue increased by 12 per cent to 767.3 million dollars, of Latin America remained the largest revenue contributor, at 37 per cent of total revenue from 33 per cent in the first half of the year. This is despite a further depreciation in the Brazilian currency relative to the US dollar.

The group’s consulting services division accounted for one per cent of group revenues for both the first and second half of the year, and two per cent of EBITDA for the year as well. Revenue for the division however contracted slightly from 37.1 million dollars from 38.3 million dollars.

“Despite generally more positive macroeconomic news flow, trading conditions continue to remain challenging but stable, particularly in the European and North American markets,” said the group.

“The group remains very well positioned to support its vendors and customers through its investments to drive scale and create broad international coverage.”

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