Datatec expects to report higher annual earnings

International ICT company Datatec expects to report higher earnings for the year ended February, it said on Thursday.

Headline earnings per share (HEPS) are expected to be 13 US cents to 15c after a headline loss per share of 9.3c a year ago.

The prior-year result was affected by the share-based payments charge on settlement of the Westcon International equity appreciation plan.

Group revenue is expected to 6% higher at about $5.46bn. Underlying EPS, which excludes items including profit or loss on sale of investments and assets, amortisation of acquired intangible assets and unrealised foreign exchange movements, is expected to be between 19c and 21c from 7.9c before.

The group said in a statement that Westcon International continued to deliver an excellent financial performance during the second half of financial year 2024. Logicalis International also had a strong second half, which included greater net revenue reported software sales.

However, Logicalis Latin America faced difficult market conditions, especially in Argentina and Brazil, which adversely affected its performance in the second half.

In January, Datatec acquired UK-based Rebura in a deal that aims to augment its cloud-based solutions. The group has been working on ways to unlock value from its existing structure, while investing in the growth of its core businesses.

The cash transaction, the value of which was not disclosed, was concluded through Datatec’s subsidiary, WestconComstor.

FIGHT TO REGAIN VALUE

With operations in more than 50 countries, the group is one of the JSE’s largest information and communication technology (ICT) services firms.

Business Day reported in October that CEO Jens Montanana had been fighting to regain much of the value Datatec had lost over the years.

The majority of those losses have been attributed to the firm’s international operations — the bulk of its business — which struggled to be profitable over the past decade, resulting in a series of corporate actions to slim down the group.

To deal with its valuation gap, the group assembled a team from global investment bank Lazard to seek ways to unlock value.

The company said in 2023 it was considering all options, including listing Logicalis and Westcon International separately or selling to a larger group.

The group expects to release its results on about May 27.