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Interim statement from Datatec

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Datatec has published an Interim Management Statement (IMS) covering the period from 1 March 2016 to 30 June 2016.
The Group has had a sound trading start to the year, with improved gross margins, in a tough global macro environment marked by continuing volatility in many markets.
Group revenues were $1,97-billion, a reduction of 11% against revenues of $2,22-billion for the four months to 30 June 2015. This reflects a much stronger US Dollar in this Reporting Period and the exceptionally strong revenue growth of 18% in the Comparable Period.
Gross margins were 13,8%, up from 12,8% in the Comparable Period.
CEO Jens Montanana says: “The improvement in our gross margins is encouraging in a period where revenues have been comparatively softer, as the much stronger US Dollar continued to impact emerging markets.
“We are committed and focussed on completing the restructuring initiatives within Westcon which will enhance our operational performance, including the new ERP system roll-out and Business Process Outsourcing transformation.”
WestconGroup revenues declined by 13% (11% in constant currency), primarily as a result of previously very strong revenue growth in the Comparable Period, particularly in the Comstor business. Gross margins improved to 10,6% from 10% in the Comparable Period.
North American revenues were softer due to lower Cisco sales in the Comstor division’s federal business unit. The Asia-Pacific region had a solid performance in Asia, offset by a weaker performance in Australia. Germany was the best performing market within EMEA while trading in the Middle East and Africa was softer than in the Comparable Period. Trading conditions in Latin America have started to improve.
Both the Business Process Outsourcing (BPO) transition and further ERP implementations are progressing according to plan and will deliver future cost savings and improvements in operational efficiency.
Foreign exchange losses in Angola have reduced markedly to $0,4-million, compared to $7,8-million in the Comparable Period.
Logicalis showed an improvement of 1,1% in gross profit contribution, despite a slight decline in revenues of 5,6% (flat in constant currency terms). Gross margins expanded to 22,8% from 21,3% in the Comparable Period.
Latin America revenues were lower than the Comparable Period, due to both the much stronger US Dollar and market softness in Brazil. Encouragingly, a strong recovery in new business took place in Brazil, resulting in a growing order book.
North American revenues were slightly lower. However, a large low-margin product transaction in the Comparable Period resulted in significantly higher gross margins in the Reporting Period.
In Europe, Germany and Spain continue to perform well, while restructuring of the UK operations is expected to be completed during this financial year.
Asia-Pacific delivered a much improved performance, which included the contribution from Thomas Duryea which was acquired on 1 December 2015.
Logicalis acquired Lantares, a Spanish IBM Cognos Partner and professional services provider specialising in Business Intelligence and Data Analytics, on 19 May 2016.