Datatec has released an interim management statement covering the period from 1 September 2013 to 31 December 2013, and a trading statement for the financial year ending 28 February 2014.
Group revenues for the financial year are still expected to be in the range $5,6-billion to $5,8-billion (2013: $5,25-billion).
However, the board expects the Group’s profitability to be lower than previously forecast as a result of softer trading in Westcon, the impact of the Westcon ERP transition in North America and a non-cash provision of up to $20-million relating to the recoverability of certain assets in Westcon North America.
This provision could reduce the Group’s current year’s profit after tax by up to $13-million and earnings per share by up to 7 US cents.
Consequently, the Board expects earnings per share (HEPS, EPS and underlying earnings per share) could be below the previously published forecasts by at least 20%. An estimate of full year earnings will be provided in the pre-close year end statement in March.
The Group expects to maintain its distribution to shareholders, via a final capital reduction out of contributed tax capital in lieu of a dividend, at 9 US cents (2013: 9 US cents), making a distribution of approximately 17 US cents per share in total for the year ending 28 February 2014, (2013: 17 US cents).
Westcon has continued to be impacted by the ERP transition in North America and particularly in high volume transaction business as well as softer trading in some markets that have seen weaker currencies versus the dollar.
Trading in Logicalis has remained robust during the Period in an environment which still presents challenges in certain markets. Analysys Mason has again been the strongest performer in the Consulting Services division.
Separately today, Datatec has announced two Board changes. Rob Evans, the Group’s Chief Financial Officer, will become Group Operations Director with effect from 1 June 2014. The addition of this new Board role reflects the growing scale and complexity of the Group’s operations. Jurgens Myburgh, who will join the Group on 1 May 2014 as Chief Financial Officer designate, will succeed Rob on 1 June 2014.
“Notwithstanding the disappointing performance in Westcon 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. The business remains well positioned to continue to trade successfully and regain momentum,” says Jens Montanana, CEO.
“The performance of Logicalis and Consulting Services across all regions remains solid.”
The Group expects to release its full year results for the financial year ending 28 February 2014 on or around Wednesday, 14 May 2014 and a further update will be provided in the March pre-close year end statement.
The financial information on which this Interim Management Statement and Trading Statement is based has not been reviewed and reported on by Datatec’s external auditors.
