Deatatec expects the second half of the current financial year to see an improvement on the first half of this year and on the second half of last year.
This is the conclusion based on trading and profitability during the quarter from 1 September 2009 to 31 December 2009, which has been publisehd in an interim management statement (IMS).
The group has returned to revenue growth in all its divisions during the second half, with the early signs of improvement seen at the end of the second quarter continuing into the second half of the current financial year.
Overall gross margins have remained stable.
On 14 May 2009 the group published a forecast for the financial year ending 28 February 2010 of revenues of between $3,7-billion and $4-billion, profit after tax of about $44-million, underlying earnings per share of about 29 US cents and earnings and headline earnings per share of about 23 US cents. Based on current exchange rates and trading conditions, all of these forecasts remain unchanged.
Jens Montanana, CEO of Datatec, says: "We are very pleased to see that all parts of the group around the world are now showing revenue growth with Logicalis appearing to pass its inflection point at the end of 2009. Our cash generation remains strong and margins are steady.
"The inherent leverage in our business model is beginning to show through as the cost reductions initiated over a year ago provide a solid basis for capturing the benefits of any revenue growth."
Westcon`s strong financial performance during the first half of the current financial year continues to improve steadily. Third quarter revenues showed sequential growth over the first two quarters, with stable gross margins, EBITDA margins and improved profitability. Westcon is benefiting strongly from the high operational gearing that exists as a result of its significantly reduced cost base and improved operational efficiencies.
Trading in the Americas, particularly in the US, continued to improve over the first half of the current financial year, with conditions in Europe stable and the Asia Pacific region remaining strong.
Westcon Emerging Markets (Africa, Middle East and India) is continuing to trade well with an improved performance over the prior year.
Westcon`s strong working capital and operating cash flow management has continued.
Logicalis trading improved from the first half of the financial year, although the business continues to be affected by larger projects being delayed with the resultant impact on attached services. However, all operations appear to have passed an inflection point.
Particularly pleasing was a very strong performance in the UK in December on the back of the IBM year end and another solid performance in South America.
The acquisition of NetStar Group Holding for $19,8-million in new Datatec shares, announced on 8 December 2009, is expected to complete shortly. This is expected to be an earnings enhancing acquisition of an established independent provider of network integration and managed services across the Asia-Pacific region, and brings with it an excellent reputation.