Datatec’s results for the first half of the 2026 financial year were boosted by continued margin expansion and a strong profit-growth trajectory in Westcon, driven by a growing recurring software and services mix. Over 70% of sales are now derived from software and services.
Logicalis International generated strong operating leverage, and Logicalis Latin America delivered a considerably improved financial performance. All divisions also achieved a reduction in net finance costs resulting from good working capital management and reduced interest rates.
Jens Montanana, chief executive of Datatec, comments: “I am pleased to report another period of outstanding operational execution and financial performance and a further improvement in the quality of Datatec’s earnings. The strong profit improvement and an enhanced dividend payout ratio led to a significant increase in our interim dividend, up from 4 US cents to 10 US cents.”
He says several sector trends strongly favour Datatec’s business lines and expertise. These include, among others, that:
- AI continues to drive generational change in infrastructure required for data centres, networks and cyber security demand;
- The modernisation of IT infrastructure to support hybrid-cloud is driving managed services and new generation of product and SaaS sales; and
- Vendors are increasingly relying on channels and experienced partners such as Datatec’s subsidiaries, who are leaders in their respective fields, to address complex solutions, digital integration and ongoing customer support.
Westcon International grew gross invoiced income by 9,8% to $2 778,4-million with growth across all regions. Westcon’s gross profit rose by 13,8% to $245,9-million and gross margins increased to 25,1%, benefiting from tax credits and higher margins in Asia-Pacific. Adjusted EBITDA increased by 7,3% to $76,4-million, demonstrating good operating leverage. Recurring sales in this business have grown to 68% of total sales.
Logicalis International grew gross invoiced income by 11,4% to $1 037,1-million due to strong trading in both annuity services and product businesses, particularly in North America. All regions reported strong year-over-year growth. Gross profit grew by 11,3% to $182,5-million. Gross margins increased to 29,8%, reflecting strong growth in annuity income, now comprising 62% of total income. Operating efficiencies drove higher conversion of gross profit into Adjusted EBITDA, which increased by 36,5% to $52,4-million.
Logicalis Latin America delivered a strong financial performance, reinforcing its resilient footprint. This performance was underpinned by effective operating expense management and continued gross margin expansion. Gross invoiced income remained flat at $260,9-million. Gross profit grew by 6,2% to $51,3-million, and gross margin to 22,9%, mainly due to the volume recovery in Brazil and higher product margins achieved across the region. Adjusted EBITDA doubled, benefitting from the non-recurrence of one-off items in the prior period.
The group reports that trading conditions are marked by a higher proportion of software and services, with increased margins, along with rapidly growing IT complexity that is driving strong demand for Datatec’s specialised services and expertise. Tight cost controls are improving gross profit to EBITDA conversion. The Group will also persist in its efforts to unlock shareholder value within the context of its Strategic Review.
Montana concludes: “AI-ready IT and network infrastructure will become essential for most businesses. For our industry, this will also drive faster networking, distributed data centres, more local computing and increased cyber threats, all of which should continue to benefit the Group. We expect improved full-year financial performance across all our divisions when compared to the previous financial year.”