Datatec has delivered a satisfactory performance for the period from 1 March 2014 to 30 June 2014, with group revenues higher overall than those for the four months ended 30 June 2013.
Westcon’s financial performance continues to improve as it successfully addresses the operating issues experienced during the financial year ended 28 February 2014. Logicalis is experiencing a slow-down in trading, most of which was anticipated as part of the FIFA World Cup in Brazil.
CEO Jens Montanana comments: “Trading conditions across the group remain varied. However, our strategy of developing a global footprint and the diversification of our business streams, continues to provide resilience and sustainable growth for the group.
“We are very pleased with the progress Westcon is making in increasing operating efficiency and we are seeing volume pick up and market share gains.
“While Logicalis has experienced a slow-down in trading we remain confident, based on the significant backlog of business, that trading will recover in the second half.”
On 14 May 2014 the group published a forecast for the financial year ending 28 February 2015 for revenues above $6-billion and underlying earnings per share of more than 40 US cents.
This forecast was based on the following assumptions: revenue growth will be largely driven by an improved performance at Westcon; Westcon’s revenues will constitute approximately 72% of the total revenue mix and Logicalis’ revenues 27%; a small improvement in operating margins at Westcon and Logicalis; an effective group tax rate of 34%.
The slow-down at Logicalis’ Brazil unit is expected to impact group earnings at the half-year reporting stage. However, based on current exchange rates, market conditions and the increased backlog at Logicalis, the Group’s forecast for FY15 remains unchanged.
Westcon has achieved revenue growth of 11% over the comparative period last year. Growth was achieved in all geographical markets except Asia Pacific. In North America, revenues were 17% higher. Gross margins have been sustained relative to the comparative period.
Logicalis reported revenue 8% below that of the same period last year. The FIFA World Cup has resulted in telecommunications and service providers suspending installation activities on their networks. Logicalis’ sales backlog indicates that business should return to expected levels but this effect will skew the division’s results more towards the second half of FY15.
Gross margins continued to improve as the share of annuity services revenue continues to grow in the sales mix.
Trading in the consulting Services Division was satisfactory. In June 2014, the business of the Intact Group was transferred into Westcon Group to support the newly established services operations of Westcon.
The group expects to release its half year results for the six months ending 31 August 2014 on Wednesday 15 October 2014.