Datatec pours mixed cocktail of fiscal '13 numbers

Logicalis went bananas, sez Montanana

Tech group Datatec was not yet ready to call an end to market uncertainty across the globe following a mixed turnout for its distribution and integration units in fiscal '13 ended February.

Group sales at South Africa-listed Datatec climbed four per cent to $5.25bn including $185m from acquisitions, but operating profit fell six per cent to $141.3 and net profit dipped 4.5 per cent to $85m.

In a turnaround from a year ago, it was integrator Logicalis that fuelled bottom line expansion - with operating profit up 28 per cent to $54.7m on the back of a nine per cent hike in sales to $1.35bn.

"All regions [for Logicalis] saw solid year on year growth and the performances of the UK and North America were particularly encouraging given the broader macroeconomic situation," quoth Datatec CEO Jens Montanana.

Product reselling was up eight per cent at Logiclais, services revenues jumped 14 per cent and annuity based services bounced 15 per cent.

Higher operating costs at distie arm Westcon, up more than 22 per cent to $325.5m from $266.3m a year ago, hurt operating profit at the distributor, which fell 18.4 per cent to $98.2m.

The sales engine at Westcon didn't slow as revenues went up three per cent to $3.8bn, aided by a $174.3m contribution from acquisitions that included PT Netpoleon and Afina Group.

Cisco accounted for 49 per cent of sales, down from 51 per cent a year ago, as Security, Convergence and Other represented 24,12 and 15 per cent of the remaining turnover.

Montanana said in tinned quotes that in the first half of the fiscal year the group "performed well in most operations around the world" but in the latter half "Westcon experienced a slowdown in revenues, particularly in Europe and North America".

The Consultancy business, comprising Analysis Mason, Intact and The Via Group saw revenues fall to $74m down from $79.4m, but Datatec did not reveal operating profit for this operation.

On the outlook, Montanana said:

"Weak economic conditions continue to prevail in most of Datatec’s markets. Companies remain cautious about investment, generally have strong balance sheets and are mainly focused on IT projects with compelling return on investment."

He added that cloud computing is driving growth across numerous areas including data centre, networking, managed services, unified comms and security.

"The Board expects Westcon to return to revenue growth with operating leverage returning in the 2014 financial year," he added.

The group is forecasting revenues of between $5.6bn to $5.9bn for fiscal 14. ®