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DATATEC LIMITED - INTERIM MANAGEMENT STATEMENT

Release Date: 18/07/2012 08:00
Code(s): DTC
Wrap Text
DATATEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC

INTERIM MANAGEMENT STATEMENT


Datatec, ("Datatec" or the "Group", JSE and LSE: DTC), the
international Information and Communications Technology (ICT) group,
is today publishing an IMS (Interim Management Statement) covering
the period from 1 March 2012 to 30 June 2012 ("the Period"). Group
The Group's trading and underlying earnings* are continuing to
improve but growth is slowing in a weakening economic environment as
the fall out of the Eurozone economic problems have spread globally.
However, based on current exchange rates and trading conditions, the
Group's forecasts for the financial year remain unchanged.
Overall Group revenues in the Period have improved across all
divisions in comparison with the four months ended 30 June 2011 ("the Comparative Period").
Gross margins have come under some pressure, particularly within
Westcon in developed markets, although both the Logicalis and
Consulting Services divisions have performed relatively robustly.
From a regional perspective Asia and Latin America remain resilient, Europe is still weak and the US has slowed.
Underlying earnings* have increased year-on-year, but unrealised
foreign exchange losses (versus unrealised gains in the comparative period) have impacted operating profit growth.
On 16 May 2012, the Group published forecasts for the financial year
ending 28 February 2013, for revenues of between $5.5 billion and
$5.8 billion, profit after tax** of approximately $104 million,
underlying* earnings per share of approximately 55 US cents and
earnings** and headline earnings** per share of approximately 50 US cents. Jens Montanana, Chief Executive Officer said:
"The diversity of our business streams and global footprint has once
again enabled the Group to improve revenues and underlying earnings in a difficult environment.
'Although the outlook has become more uncertain, the defensive nature
of our business model continues to be a strong asset." Westcon
Westcon has reported revenue growth across all regions, but has had a
relatively challenging start to the year compared to the recent past.
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.
On 2 July 2012 Datatec announced Westcon's acquisition of Latin
American and Iberian multinational security, virtualisation and data
centre distributor Afina Group. The deal is expected to be earnings
enhancing and expands Westcon's presence in Latin America, the
Caribbean, Europe, and North Africa. It also broadens and deepens
Westcon's product portfolio, adding and enhancing relationships with
strategic vendors such as VMware, Riverbed, Symantec and Citrix. The
Transaction was settled by the initial payment of '30 million in cash
and '10 million worth of Datatec shares. Two additional contingent
cash payments of up to '5m each will be payable in 2013 and 2014
subject to Afina meeting certain EBITDA performance conditions.
On 16 July 2012 Westcon acquired the Austrian value added security
distributor Triple AcceSSS expanding its security business footprint
in Europe and strengthening Westcon's relationships with security
vendors such as Trend Micro, F5, Blue Coat and BlueCat. Logicalis
Logicalis has had a relatively strong start to the year, reporting
overall revenue and operating profit growth over the Comparative Period.
The UK performance has been good despite weak economic conditions.
The US and Asia Pacific regions also reported improvements. Local
market challenges in Argentina and the impact of a weaker Brazilian
Real have impacted reported results in an otherwise still resilient Latin America.
On 1 June 2012 Logicalis acquired Corpnet, a Brisbane-based provider
of IT solutions including data centre, cloud and managed services
solutions, to the Queensland, Australia mid-sized and enterprise
markets. The consideration comprised $2.7m on completion with an additional potential earn-out payment of $0.6m. Consulting Services
The Consulting Services division has continued the improved
performance of last year. Increased revenue and profitability at
Analysys Mason have outweighed the impact of a more challenging sales environment at both Intact and Via Group. Interim results
The Group expects to release its interim results for the six months
ending 31 August 2012 on Wednesday 17 October 2012.
The financial information on which this statement is based has not
been reviewed and reported on by Datatec's auditors.
* Underlying earnings excludes goodwill and intangibles impairment,
amortisation of acquired intangible assets, acquisition related
adjustments, profit or loss on sale of assets and businesses, fair
value movements on acquisition related financial instruments and unrealised foreign exchange movements.
** Forecasts for profit after tax, earnings per share and headline
earnings per share do not take into account any fair value gains or
losses on acquisition related financial instruments (including put option liabilities) which are required under IFRS. Enquiries: Datatec Limited (www.datatec.co.za) Jens Montanana, Chief Executive
Officer +44 (0) 1753 797118
Rob Evans ' Chief Financial Officer +27 (0) 11 233 1221 Wilna de Villiers ' Group Marketing
Manager +27 (0) 11 233 1013
Jefferies International Limited ' Nominated Advisor and Broker
Nick Adams/Tom Rider +44 (0) 20 7029 8000 finnCap ' Broker Tom Jenkins/Henrik Persson
+44 (0) 20 7220 0500 College Hill Adrian Duffield/Jon Davies/Rozi
Morris (UK) +44 (0) 20 7457 2020
Frederic Cornet/Lexi Ball (SA) +27 (0) 11 447 3030 Sandton 18 July 2012 Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 18/07/2012 08:00:00 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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