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Interim Management Statement and Trading Statement
DATATEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
Interim Management Statement and Trading Statement
Datatec, ("Datatec" or the "Group", JSE and LSE: DTC), the international Information and
Communications Technology (ICT) group, is today publishing an Interim Management Statement
covering the period from 1 September 2012 to 31 December 2012 ("the Period") and Trading Statement
for the financial year ending 28 February 2013.
The Board now expects the Groups performance for the financial year to be lower than originally
forecast***. Group revenues for the financial year are expected to reach approximately $5.4 billion
(2012: $5.0 billion) including Westcons acquisition of Afina Group in July 2012 and continued revenue
growth in Logicalis. Profit after tax** is expected to be in the range $80 million to $90 million (2012: $89
million).
Underlying* earnings per share are unlikely to reach that of last year, 2012: 47.9 cents, but are expected
to be in excess of 40 US cents. Earnings** and headline earnings** per share are unlikely to reach that
of last year, 2012 earnings* per share: 43.5 cents, 2012 headline earnings** per share: 43.1 cents, but
are expected to be in excess of 35 US cents. The lower end of all the ranges outlined above is more than
20% below the previously published forecasts.
The Group expects to maintain its distribution to shareholders, via a final capital reduction out of
contributed tax capital in lieu of a dividend, at 9 US cents (2012: 9 US cents), making a distribution of
approximately 17 US cents per share in total for the year ending 28 February 2013, up from 16 US cents
in 2012.
Since the Groups trading statement on 3 December 2012 which was prompted by a weaker than
expected performance by Westcon in the third quarter, Westcon has reported continuing softness in its
performance. December was particularly challenging especially in the US and Europe. In contrast
Logicalis continues to perform strongly and in line with expectations.
The Groups gross margin expansion has continued in the second half and overall Latin America once
again is the strongest market. The Group continues to operate with comfortable head room against its
working capital lines.
Jens Montanana, Chief Executive Officer said:
"Our global reach and diversity are continuing to provide relative resilience against the poor
economic backdrop of many of the world's economies. Although disappointed by the recent
developments in Westcon, we are not immune to the continuing weakness in many sectors,
especially in the more mature markets. We are already adjusting our business model
accordingly.
Latin America, the Middle East, Africa and Asia remain the best performing regions.
Westcons performance in North America and Europe has been weaker than expected whilst
Logicalis has performed robustly in both of these regions."
Westcon
Westcons second half performance has most notably been affected by poorer market conditions and
external factors in North America as well as additional one-off costs associated with the SAP
implementation. Europe has remained weak whilst Asia Pacific and AIME have slowed; Latin America
remains the most robust region.
Cash generation is expected to improve at Westcon in light of recent slower trading as working capital
demands ease.
The division recently announced the acquisition of Comztek, a major ICT and networking distributor
in Africa.
Logicalis
Logicalis has continued to perform strongly and in line with expectations amidst difficult market
conditions.
Operating profitability in the second half of the current financial year is expected to be better than both
the first half of the current financial year and the second half of the prior financial year.
Brazil is again generating a significant proportion of operating profitability with both the US and UK
having recovered and performing well.
Consulting Services
Analysys Mason is expected to report a solid year whilst other businesses in this division have
experienced weaker trading conditions in the second half.
Full year results and pre close statement
The Group expects to release its full year results for the financial year ending 28 February 2013 on or
about Wednesday 15 May 2013 and a further update will be provided in the March pre-close year end
statement.
The financial information on which this Interim Management Statement and Trading Statement is based
has not been reviewed and reported on by Datatec's external auditors.
* Underlying earnings per share excludes goodwill and intangibles impairment, amortisation of acquired intangible
assets, 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.
*** 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.
ENDS
Enquiries:
Datatec Limited (www.datatec.co.za)
Jens Montanana, Chief Executive Officer +44 (0) 1753 797118
Rob Evans Chief Financial Officer +44 (0) 207 395 9012
Wilna de Villiers Group Marketing Manager +27 (0) 11 233 1013
Jefferies International Limited Nominated Advisor and Broker
Nick Adams/Alex Collins +44 (0) 20 7029 8000
finnCap Broker
Tom Jenkins/Henrik Persson +44 (0) 20 7220 0500
College Hill
Adrian Duffield/Rozi Morris (UK) +44 (0) 20 7457 2020
Frederic Cornet/Lexi Ball (SA) +27 (0) 11 447 3030
Sandown
16 January 2013
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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