Datatec trims full-year profit forecast
Montanana cites performance of Westcon in North American market
TECHNOLOGY firm Datatec said in its interim results yesterday it was lowering its forecast for its financial year ending February next year, due to the underperformance of subsidiary Westcon.
Datatec yesterday reported headline earnings per share of 18.2c for the six months to August, down from 20.7c last year.
It said the revision was also as a result of the “effect of continued disruption caused by the system transition” — a reference to the enterprise resource planning software it installed.
The group expects full-year revenues of between $5.6bn and $5.8bn, from a previous forecast of $5.6bn-$5.9bn. Last year’s revenue was $5.25bn.
Yesterday’s interim results showed for the six months to August, Datatec’s revenue was $2.77bn from $2.62bn in the previous corresponding period.
Full-year profit after tax is expected to be $88m from a previous forecast of $102m, down from last year’s $85m.
The group reported a decline in profit after tax, to $39.6m from $41.3m. CEO Jens Montanana said yesterday Datatec achieved modest revenue growth with expanding gross margins in the six months to August.
Across the group, the US market did not grow as much as anticipated.
“Performance in parts of Westcon’s North American business, where the new enterprise resource planning system has been implemented, has been disappointing. The volume shortfall in that region has been the main reason for the group’s underperformance in the period,” he said.
Logicalis continues to perform strongly and in line with the group’s expectations while 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. Our confidence in our long-term strategy has enabled us to maintain the interim dividend (capital distribution).”
Latin America continues to be the group’s strongest performing region. Overall, group gross margins expanded to 15%, compared to 14.4% last year.
A big reseller for the networking giant Cisco Systems, Datatec is active in more than 40 countries. “Datatec has a strong market position with no particular dependency on any single market, territory or technology sector.”
Mr Montanana said the group would continue seeking opportunities in Asia Pacific, and parts of the Middle East and Africa, so as to “improve its competitive position”.