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    Home » News » Datatec lowers forecasts on Westcon woes

    Datatec lowers forecasts on Westcon woes

    By Duncan McLeod16 January 2013
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    Jens Montanana
    Jens Montanana

    JSE-listed global technology distribution and services company Datatec is lowering its forecasts for its full financial year, which ends on 28 February, due to a poor second-half performance at Westcon.

    Group revenues for the 2013 financial year are now expected to be about US$5,4bn, up from $5bn in 2012. Profit after tax should be between $80m and $90m, from $89m a year ago.

    “Since the group’s trading statement on 3 December 2012, which was prompted by a weaker than expected performance by Westcon in the third quarter, Westcon has reported continuing softness in its performance,” Datatec says in a trading statement. “December was particularly challenging, especially in the US and Europe. In contrast, Logicalis continues to perform strongly and in line with expectations.”

    Latin America remains Datatec’s strongest market.

    It says Westcon’s second half performance was hit by “poorer market conditions and external factors in North America”. Once-off costs associated with the implementation of the SAP enterprise resource planning suite will also have an impact on the numbers.

    Westcon in Europe has remained weak, while Asia-Pacific and Africa, India and the Middle East have slowed; Latin America remains the most robust region.

    The group warns that headline earnings per share are unlikely to be as high as last year’s $0,43 but should be higher than $0,35. However, it expects it will maintain its distribution to shareholders of $0,09/share, making for a total distribution of $0,17 for the year, up from $0,16 in 2012.

    “Although disappointed by the recent developments in Westcon, we are not immune to the continuing weakness in many sectors, especially in the more mature markets,” says Datatec CEO Jens Montanana. “We are already adjusting our business model accordingly.”

    Datatec’s share price has risen by 15,9% in the past 12 months. It was trading 2% lower on Wednesday morning, shortly after updating shareholders about its financial performance.  — (c) 2013 NewsCentral Media



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