Datatec was trading off by more than 2% in midmorning trading on the JSE on Monday after it warned that its biggest subsidiary, technology distributor Westcon, experienced a weak third financial quarter.
“Westcon’s performance in the third quarter has been weaker than expected [and] the board now considers it unlikely that the group will reach its published forecasts,” Datatec told shareholders in a statement published by the JSE.
It said that since it published its half year results on 17 October, Westcon’s trading had been slower than expected and “comparatively lower than the same period last year”.
“Continued weak conditions in Europe, business disruption in North America due to hurricane Sandy, and lower than expected [government] business have negatively affected trading so far in the second half,” Datatec said.
Its other major subsidiary, Logicalis, continued to trade strongly and in line with expectation, it added. However, demand in the consulting services division had weakened.
The group’s published forecasts for the financial year ending 28 February 2013 are for revenues of between US$5,5bn and $5,8bn and headline earnings per share of $0,50. It said it would issue an updated forecast for the 2013 financial year in mid-January, when it issues its next interim management statement.
Datatec’s share price has added nearly 40% in the past 12 months. — (c) 2012 NewsCentral Media