JSE- and LSE-listed Datatec said on Wednesday that the lagging performance of its Westcon subsidiary’s North American operations continued to drag down the group’s performance in the current financial year.

Datatec expected to deliver lower-than-expected profitability for the year to end February 28, as Westcon North America’s softer trading for the year under review has been exacerbated by the continued impact of the transition to a new enterprise resource planning software system and a noncash provision of up to $20-million relating to the recoverability of certain assets.

“This provision could reduce the group’s profit after tax [for the current year] by up to $13-million and earnings per share (EPS) by up to $0.07,” Datatec CEO Jens Montanana said in the group’s interim management statement.

Underlying EPS, EPS and headline earnings a share were all expected to be at least 20% below the company’s forecast, in October, of $0.43, $0.38 and $0.40 respectively.

“Notwithstanding the disappointing performance in Westcon’s US operations, we are confident that the issues are being addressed and our recent moves to strengthen Westcon’s leadership team should quickly improve operating execution,” Montanana said.

The performance of Logicalis and Consulting Services remained robust.

Group revenue for the 2014 financial year was expected to be between $5.6-billion and $5.8-billion, up slightly from the $5.25-billion recorded in the 2013 financial year.

Montanana said distribution to shareholders would be maintained through a final capital reduction out of contributed tax capital in lieu of a $0.09 dividend, resulting in a distribution of about $0.17 a share for the 12 months to February.

Datatec would release an estimate of full-year earnings in the preclose year-end statement in March, followed by the full year results in May.

Meanwhile, CFO Rob Evans would, effective June 1, step in as group operations director – a new position that would see him take responsibility for business process improvement, internal audit, post-acquisition integration oversight and internal corporate development.

“The size and complexity of the group now merits the position of a group operations director,” Montanana commented.

Chartered accountant Jurgens Myburgh, who would join Datatec as CFO designate from Standard Bank, in May, would succeed Evans in June.