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Datatec focuses on Westcon improvement

  • Release time:2014-05-16

  • Browse:6031


  • Datatec unit Westcon was again impacted by the rollout of an enterprise resource planning (ERP) system in North America.
    Despite the unit's sluggish performance in the year to February, Datatec grew its top line 8%, to $5.69 billion, while gross profit also gained 8%, to $841.4 million. However, underlying earnings per share came in at 35.7 US cents, a decline from last year's 43.1c.
    Weston, which had a challenging year, has seen its first half woes continue throughout the year, although it grew its revenue 6%, to $4.1 billion, most of which came from its European operations. Westcon accounts for the bulk of Datatec's revenue and reported a disappointing first half after the rollout of the ERP system had a big effect on transaction volumes.

    The group's second-largest unit, Logicalis, performed in line with management's expectations, and benefited from its purchase of 2e2's European operations last March.
    Logicalis bought the European subsidiaries of 2e2, excluding the UK business, for €24 million – then R283 million – in shares and cash from the company's administrators. This came a few months after its UK operations were put under administration after the group, one of the UK's largest IT services companies, failed to secure finance to repay its "considerable debt", reported InformationAge.

    CEO Jens Montanana says in the current financial year, "we anticipate another robust performance for Logicalis, while Westcon will continue to consolidate and focus on improving operational leverage".
    Datatec says its mid-term priority remains focused on building scale and critical mass in the developing markets that it has moved into successfully in the past few years. Its near-term priority is restoring Westcon to operational efficiency and a profit growth trajectory.
    Latin America continues to be the dual-listed company's strongest growing region, although the weakness of emerging market currencies in the year impacted performance in US dollar terms. It adds it has also seen a moderate economic recovery.
    Some 39% of Datatec's revenue comes from its operations outside of North America and Europe.

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