Datatec trading 'strong'
This is being underpinned by the broad diversity of the group’s revenue sources in terms of geography, technology and operations, it said.
In its interim management statement, covering the period from 1 March to 31 May 2008 – the first quarter – the group said despite continuing softness in the US and slower market conditions now impacting many parts of Europe, the Board expects that the group will deliver good revenue growth for the first half of the year and an improved financial performance when compared with the same period last year.
Revenues are expected to exceed $2.2 billion for the six months to end August 2008, compared to $1.9 billion for the six months ended August 2007.
Datatec said the group’s broad international base, which includes strong contributions from the fast developing markets of South America, Africa and the Middle East as well as Asia-Pacific, is improving the balance of business and helping to mitigate and offset lower growth in the US and European markets.
The performance of the Westcon Group in the first quarter was better than the comparative quarter of the prior financial year, it said.
A subdued performance in the US, and slower growth in Europe, contrast with more robust performances from South America and Asia Pacific.
Revenues for the first half are expected to be ahead of the comparative period last year. The businesses acquired during the 2008 financial year are now fully integrated.
The strong performance from Logicalis in the second half of last year has continued into this year with Logicalis recording its best first quarter performance to date, which has resulted in continued operating profit margin expansion.
These improved margins are mainly as a result of the evolution of the services components in the Logicalis business model, and a particularly strong performance from South America, which is expected to contribute significantly to the first half of the year, on the back of the recent Promon acquisition.
AnalysysMason’s trading during the first quarter has been resilient and remains above levels of the prior year. This is expected to produce an improved first half performance, Datatec said. Its Other Holdings division – Middle East, Africa and emerging Asia -continues to grow revenues strongly.
New countries within emerging Asia, such as India, are being targeted for further investment. Datatec continued to repurchase its own shares for cancellation.
A total of 1.188 million shares have been repurchased since the end of the financial year end closed period.
Datatec expects to release its interim results on Wednesday 15 October.
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