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Jul 18, 2012

Datatec year-end forecast remains on track despite market pressures

Afina Group|Africa|Consulting|Environment|SECURITY|Triple AcceSSS IT|Africa|Europe|Latin America|North America|United States|Communication Technology|Product|Services|Solutions|Jens Montanana|Asia Pacific|Caribbean|North Africa
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Despite a weakening economic environment slowing market growth, JSE- and LSE-listed Datatec on Wednesday said it expected the group’s trading and underlying earnings to continue improving.

The information and communication technology group noted that market conditions in the Asia Pacific and Latin America remained resilient, but continued to be dragged down by a slowing US economy and a weak European environment.

In its interim management statement, released on Wednesday, Datatec reported improved overall revenues across all divisions during the period from March 1 to June 30, compared with the comparative period the year before.

CEO Jens Montanana stated that, while subsidiaries Logicalis and Consulting Services performed relatively robustly during the period, Westcon’s lagging performance in developed markets, such as Europe and North America, placed pressure on overall gross margins.

“Although the outlook has become more uncertain, the defensive nature of our business model continues to be a strong asset," said Montanana, adding that its diversified business and global footprint enabled improved revenues and underlying earnings in a difficult environment.

Datatec has been aggressively pursuing acquisitions to “broaden and deepen” Westcon's product portfolio, add and enhance relationships and expand its footprint, particularly in Latin America, the Caribbean, Europe and North Africa.

The subsidiary recently bought Austrian value-added security distributor Triple AcceSSS IT and its Swiss subsidiary; Latin American and Iberian multinational security, virtualisation and data centre distributor Afina Group; and Indonesian value-added distributor of information security, networking and convergence solutions PT Netpoleon.

Datatec forecast revenues of between $5.5-billion and $5.8-billion for the year ended February 2013, as well as an estimated profit of $104-million, underlying earnings a share of about 55c and earnings and headline earnings a share of about 50c.

The group would release its interim results for the six months ending August 2012 in October.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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