JSE-listed global technology distribution and services group Datatec is firing on all cylinders, if it’s interim results for the six months to 31 August are anything to go by.
The group reported a “solid” first half that would have “been even better” if not for worldwide semiconductor shortages, CEO Jens Montanana said on a webcast with investors on Thursday. Backlogs of orders at Westcon International, its distribution arm, have more than doubled, he said.
For the first half of the 2022 financial year, Datatec reported revenue growth of 15% to US$2.3-billion, while earnings before interest, tax, depreciation and amortisation — a measure of operating performance — jumped by 24% to $75-million. Underlying earnings per share more than doubled. The group declared an interim dividend of R5.12/share and said it will also pay a special dividend of $70-million (just over R1-billion) following the successful repayment of loans previously made by Datatec to Westcon.
Datatec said there was “strong operational execution in all divisions”, with elevated demand for networking, cybersecurity and cloud infrastructure.
“Datatec’s first half results were supported by excellent operational execution, with all divisions delivering strong top- and bottom-line growth as the positive impact of increased digitisation on recurring software and services continues,” Montanana said in a statement with the interim results.
“We are seeing pent-up demand in many forms across the world and expect a strong performance throughout the second half of the year. However, the semiconductor shortage is expected to continue to result in significant backlogs across the group well into 2022,” he said.
Potential options
He added that Datatec is “progressing with several options and initiatives” to unlock and maximise shareholder value. In September, Montanana said in an interview with TechCentral that the group was considering several options, including subsidiary listing and possible asset sales to address the situation where Datatec’s valuation was languishing far below its international peers.
“Datatec’s strategy is to improve shareholder returns over the medium term through a combination of corporate and business development actions aimed at enhancing the competitiveness and profitability of its subsidiaries and operating divisions,” the group said on Tbursday.
“As part of the strategic review, the board is currently considering a number of potential options including, but not limited to, private equity participation, joint ventures, international listings, divisional asset unbundling and other value-creating structures.” — © 2021 NewsCentral Media
