Datatec’s shares rise on pre­dicted surge in prof­its

Solid fi­nan­cial per­for­mance in all di­vi­sions

Pretoria News - - BUSINESS REPORT - SANDILE MCHUNU [email protected]

DATATEC’S share price leapt by more than 45 per­cent on the JSE on Fri­day after the in­for­ma­tion and com­mu­ni­ca­tions tech­nol­ogy (ICT) group said it ex­pected all its di­vi­sions to re­port a surge in prof­its for the year to the end of Fe­bru­ary.

The group said in a trad­ing update that it was in the process of fi­nal­is­ing its re­sults for the year to the end of Fe­bru­ary, and it had achieved a solid fi­nan­cial per­for­mance in all of its di­vi­sions.

“The turn­around in West­con In­ter­na­tional con­tin­ued with a sub­stan­tial im­prove­ment in prof­itabil­ity in the fi­nan­cial year to end Fe­bru­ary 2019. Log­i­calis is also ex­pected to pro­duce a strong re­sult, es­pe­cially in its Latin Amer­ica re­gion. Analysys Ma­son had an­other growth year, with much im­proved prof­itabil­ity,” the group said.

The share price re­sponded pos­i­tively to the trad­ing update and surged to R26.80 a share, up from Thurs­day’s clos­ing price of R18.25. It closed at R26 on Fri­day.

Last year, West­con In­ter­na­tional ben­e­fited from the turn­around strat­egy as it re­ported earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (Ebitda) of $5.6 mil­lion (R98.40m), re­cov­er­ing from a loss of $48.1m a year ear­lier, while Log­i­calis in­creased its Ebitda by 8.4 per­cent to $93.4m.

The group said its bal­ance sheet re­mained strong and was ex­pected to re­port a re­duc­tion in net debt at the end of Fe­bru­ary com­pared to its net debt re­ported in the half-year re­sults at the end of Au­gust. The group re­ported a net debt of $193.7m at the end of Au­gust.

The group also ex­pected a solid per­for­mance in the next 12 months.

“For the first few weeks of fi­nan­cial year 2021 to date, or­der in­take for West­con has been ahead of this time last year, while in Log­i­calis or­der in­take for March is ex­pected to be ahead of March last year. So far we have ex­pe­ri­enced lim­ited sup­ply chain in­ter­rup­tions. We are see­ing in­creased de­mand for our re­mote ac­cess com­put­ing, se­cu­rity and col­lab­o­ra­tion net­work­ing so­lu­tions,” the group said.

Datatec has warned about the Covid-19 out­break, which has im­pacted its op­er­a­tions. “The Covid19 virus out­break has very rapidly spread across the globe in re­cent weeks and into ev­ery re­gion where Datatec op­er­ates. We are con­tin­u­ing to take ap­pro­pri­ate ac­tion to en­sure the safety of all our em­ploy­ees and cus­tomers, in ad­di­tion to fol­low­ing the World Health Or­gan­i­sa­tion and lo­cal coun­try and govern­ment guide­lines,” it said.

The group has closed a num­ber of of­fices and it has en­cour­aged most of its em­ploy­ees to work re­motely where pos­si­ble.

“Across the group, em­ploy­ees are equipped with the nec­es­sary tech­no­log­i­cal tools to work ef­fec­tively from home. Our ware­houses are still func­tion­ing with new pro­to­cols for care and safety of our peo­ple,” the group said.

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