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    Home»Sections»Investment»Datatec reports strong results, says it’s bucking virus crisis

    Datatec reports strong results, says it’s bucking virus crisis

    Investment By Duncan McLeod27 May 2020
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    Jens Montanana

    JSE-listed international technology group Datatec has reported strong full-year results for the year ended February 2020, though the good performance happened before the impact of the Covid-19 pandemic and subsequent lockdowns.

    Group revenue was largely unchanged at US$4.3-billion, but earnings before interest, tax, depreciation and amortisation leapt 83% to $158.7-million from $86.8-million a year ago. It returned $60-million to shareholders through a special dividend and share repurchases after generating $215.6-million in cash from operations (from $69-million previously).

    “The group delivered strong results in the past year, supported by good operational execution in all divisions in the face of growing global economic uncertainty,” said CEO Jens Montanana in comments accompanying the results.

    The group delivered strong results in the past year, supported by good operational execution in all divisions

    “Westcon International returned to profitability and Logicalis Latin America produced an exceptional performance, as did Analysys Mason, our management consulting division, which continued to benefit from demand for 5G expertise.”

    Though the results don’t reflect the impact of Covid-19 on its operations, Datatec said it has been able to “adjust and move rapidly to a remote working environment across the group and all divisions”.

    “We have seen increased demand for technologies and services required to enhance remote working in areas such as security and network access solutions, cloud migration and infrastructure virtualisation, as well as unified communications,” Montanana said.

    ‘Good demand’

    “Datatec is well positioned to navigate the current environment in spite of the extremely uncertain macroeconomic outlook. Good demand for our solutions and services is expected to continue, while we focus on costs, and balance sheet and liquidity management.”

    However, the market uncertainty created by the pandemic has forced the group to put a planned listing of Logicalis Latin America in Brazil on ice.

    “While the potential listing remains of high interest, current market conditions are making the timing increasingly indeterminable.”

    The group said that despite the pandemic, “trading has remained steady since the beginning of the 2021 financial year, although some delays and supply disruptions were experienced, especially in countries with highly restrictive lockdowns”.

    Initial indications are that Westcon International revenues and order intake for the first quarter of FY21 are similar to the same period last year

    “Initial indications are that Westcon International revenues and order intake for the first quarter of FY21 are similar to the same period last year. For Logicalis, order intake for Q1 FY21 is similar to the corresponding period last year, with revenues for Q1 FY21 slightly lower than Q1 FY20,” it said.

    “The foreign currency exchange effects have been exacerbated so far in Q1 FY21 with the rand and the Brazilian real, in particular, depreciating dramatically against the US dollar. Sustained emerging markets currency weakness is expected for the near term.”

    It said collections from customers during the first few months of the new financial year have remained in line with historic norms.

    “Increased demand for the Group’s technology solutions is being experienced to support remote working during the lockdowns enforced throughout the world. In particular, demand for cloud computing, remote access solutions, virtualisation, security and unified communications remains strong.”

    However, the group suspended forward-looking guidance to investors given the “uncertainty over the macroeconomic outlook, both in the short and medium term”.  — © 2020 NewsCentral Media

    Analysys Mason Datatec Jens Montanana Logicalis top Westcon
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