Datatec doubles earnings, but gains come off a low base

Technology group Datatec more than doubled its first-half underlying earnings per share (EPS), although this came off a low base.

Underlying EPS rose to 3.6 US cents in the six months to end-August, from 1.4c in the matching period a year ago, the company said on Thursday in a statement.

Operating in more than 50 countries across North America, Latin America, Europe, Africa, the Middle East and Asia-Pacific, the JSE-listed company operates largely out of main its subsidiaries, Logicalis and Wescon International.

Group revenue was up 8.7% to $2bn in the review period, of which Logicalis accounted for 39% and Westcon International 60%. The consulting and financial services took up 1%.

Group gross margins dipped to 15.9%, from 16.2% in the year-earlier period.

“Logicalis performed well in the first half and produced good results despite emerging market currency headwinds, especially in its key Latin America region,” CEO Jens Montanana.

“Westcon International’s recovery is under way and we are delivering on our commitments for this division with the ERP [enterprise resource planning] system now stable, the BPO [business process outsourcing] reversal almost complete and central cost reductions on track.”

The shares were up 0.58% to R24.14 in early trade on the JSE, valuing the company at R5.4bn. No interim dividend was declared.

mahlangua@businesslive.co.za