JSE-listed technology multinational Datatec has reported a big improvement in operating profit and net profit for the year to end-February 2025, though revenue fell.
The group, which owns Westcon-Comstor and Logicalis, reported US$3.6-billion in revenue, down 8.8% from $3.9-billion in 2024. However, operating profit of $159-million was up 37% year-on-year, with net profit up 36% from $51-million in 2024 to $69-million.
“The decrease in revenue is mainly attributable to a mix change and more software and services being net-revenue-accounted,” Datatec said in commentary with the results.
“The increase in gross margin, from 22% to 25%, is largely due to changes in the revenue mix, contributing to a significant gross profit increase in Westcon International and Logicalis International.”
Cash generated from operations rose to $286-million from $175-million the previous year, while earnings before interest, tax, depreciation and amortisation (Ebitda) were up 24% year on year to $246-million. Ebitda margin rose by 1.7 percentage points to 6.6% over the same period.
Datatec’s group CEO, Jens Montanana, said the “very strong” operating and financial performance was consistent across all regions and metrics. Datatec’s four divisions – Westcon-Comstor, Logicalis International, Logicalis Latin America and Mason Advisory – employ a combined 11 100 employees worldwide.
“Increasing IT complexity driven by AI and the significant rise in interconnected digital communities is driving infrastructure demand in areas like networking and cybersecurity where we have deep domain knowledge and many years of experience,” said Montanana.
Debt reduced
Datatec’s net asset value inched up by 4% from $501-million in 2024 to $521-million in 2025. In the same period, net debt was reduced by 58% to $52-million.
The group said it continues to so see good demand for its technology solutions and services worldwide. Datatec declared an annual dividend of R2/share, up 54% from the R1.30 declared in 2024.
Read: Datatec still focused on closing valuation gap
As part of its strategy to maximise shareholder value over the medium term, Datatec said it will pursue a combination of corporate and business development actions to enhance the profitability and competitiveness of its subsidiaries.
Addressing the valuation gap between the group and its underlying subsidiaries has been a key focus for Datatec in recent years, and continues to be a top priority.
“The improving profitability and cash generation of the group’s divisions enabled us to increase our dividend payout policy to 50% of underlying earnings per share,” said Montanana.
Datatec shares were down 1.9% at R60.37/share by lunchtime trading on Tuesday, suggesting the annual results were largely in line with investors’ expectations. – © 2025 NewsCentral Media
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