Jens Montanana. Picture: MARTIN RHODES
Jens Montanana. Picture: MARTIN RHODES

Datatec would distribute about R5bn to shareholders after selling its information technology distribution and logistics business in the Americas and would use the rest of the sale proceeds for working capital and to pay off debt, CEO Jens Montanana said on Monday.

Effective September 1, the group sold Westcon Americas and 10% of Westcon International to Synnex Corporation in a deal worth up to $830m.

The transaction gives Datatec a larger bias towards Europe and emerging markets.

Montanana said he and chief financial officer Ivan Dittrich had taken over the direct running of Westcon International, which was nearing the completion of a difficult multiyear "systems and processes redesign project".

With direct management control, "we are taking a couple of layers out and shortening the decision-making cycle", he said.

In October Datatec also sold a "noncore" business in the Netherlands — Logicalis SMC — for $42m.

Montanana said the group had no immediate plans for further disposals or acquisitions.

"It’s all about focusing on an operational turnaround and getting to grips with the Westcon International business."

He said that the company was now focused on "improving our working capital and cash flows, and getting over the hump of the system and process challenges of the past few years".

Datatec on Monday reported that revenues from continuing operations fell to $1.8bn in the six months through August, from $2bn a year before.

Underlying earnings per share declined to $0.014 from $0.125. The group’s share price closed 5.4% lower at R59.76.

Montanana said the outlook for Logicalis, which had become the most profitable part of the group, "is increasingly positive, with a number of important developments set to support an overall improvement in the second half".

This was largely thanks to the acquisition of Packet Systems Indonesia in September and the awarding of a large multiyear contract with a regional telecommunications firm in Latin America.

Meanwhile, Datatec said in October that it had decided to cancel the listing of its shares on the AIM stock exchange from December 8 as the AIM listing had not diversified Datatec’s investor base.

hedleyn@businesslive.co.za

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