{"id":650364,"date":"2026-06-06T13:56:20","date_gmt":"2026-06-06T11:56:20","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=650364"},"modified":"2026-06-06T14:07:20","modified_gmt":"2026-06-06T12:07:20","slug":"datatec-takes-a-breather","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/investing\/650364-datatec-takes-a-breather.html","title":{"rendered":"Datatec takes a breather"},"content":{"rendered":"\n

Datatec\u2019s latest annual results were strong, but once-off gains and acquisition accounting gave investors pause and resulted in the share price falling by 7.95%, analyst Jean Pierre Verster said.<\/p>\n\n\n\n

Verster, the founder and CEO of Protea Capital Management, told Business Day TV<\/a> that a trading statement published two weeks before Datatec\u2019s results had created an expectation of strong results.<\/p>\n\n\n\n

However, he said when the full annual financial statements came out, the company\u2019s normalised growth may not have been as strong as some investors expected.<\/p>\n\n\n\n

Datatec is a Sandton-based ICT solutions and services group with operations including Westcon International, Logicalis International, and Logicalis Latin America.<\/p>\n\n\n\n

The company reported profit after tax of $108.7 million for the year ended 28 February 2026, equal to roughly R1.78 billion.<\/p>\n\n\n\n

This represented 56.9% growth from the $69.3 million (R1.12 billion) profit after tax reported for the previous financial year.<\/p>\n\n\n\n

Revenue increased by 3.4%, rising from $3.55 billion (R58.19 billion) in 2025 to $3.67 billion (R60.16 billion) in 2026.<\/p>\n\n\n\n

Datatec also reported EBITDA of $269.1 million, or roughly R4.41 billion, up 21.6% from $221.3 million in the prior year.<\/p>\n\n\n\n

The company attributed the performance to margin expansion and profit growth at Westcon and Logicalis International, alongside progress in Logicalis Latin America\u2019s turnaround.<\/p>\n\n\n\n

Datatec CEO Jens Montanana said the company\u2019s strong profit growth drove a 55% increase in its total dividend to $0.24 per share.<\/p>\n\n\n\n

\u201cWe are celebrating one of the strongest years in the Datatec Group\u2019s history, underpinned by excellent execution, financial performance, and operating leverage,\u201d he said.<\/p>\n\n\n\n

Datatec\u2019s gross invoiced income increased by 9.3% to $8.5 billion (R139.3 billion), driven by demand for AI software and services.<\/p>\n\n\n\n

The company said software and services now represented more than 70% of gross invoiced income, improving the margin mix across the group.<\/p>\n\n\n\n

It said AI was increasing complexity in IT environments, requiring businesses to rely more heavily on specialised service providers with deep domain expertise.<\/p>\n\n\n\n

Westcon International increased gross income to $5.74 billion (R94.1 billion) during the year, while gross profit rose to $499.2 million (R8.2 billion).<\/p>\n\n\n\n

Logicalis International increased gross invoiced income by 11.8% to $2.15 billion (R35.24 billion), supported by strong order intake and multi-year contract growth.<\/p>\n\n\n\n

Its gross profit increased by 8.0% to $385.9 million (R6.3 billion), adding to the group\u2019s higher-margin software and services exposure.<\/p>\n\n\n\n

Datatec said disciplined cost management had helped improve operating leverage and profitability across the business during the financial year.<\/p>\n\n\n\n

Market takes a break from Datatec<\/h2>\n\n\n\n
\"\"
Jean-Pierre Verster, founder and CEO of Protea Capital Management<\/figcaption><\/figure>\n\n\n\n

Verster explained that the trading statement, which JSE rules required Datatec to publish before its results, created expectations of strong numbers.<\/p>\n\n\n\n

\u201cWhen the details came out, there were some once-offs in that number,\u201d Verster stated.<\/p>\n\n\n\n

\u201cPeople just thought that maybe the more organic, like-for-like, or normalised growth wasn\u2019t quite as strong as what investors thought when they saw the trading statement.\u201d<\/p>\n\n\n\n

He said Datatec\u2019s regular small acquisitions made it difficult to assess underlying growth because the company often increased stakes over several years.<\/p>\n\n\n\n

These transactions could move from small minority stakes to controlling holdings, creating acquisition-accounting effects that complicate comparisons between reporting periods.<\/p>\n\n\n\n

\u201cThere\u2019s a lot of acquisition accounting in Datatec,\u201d Verster said, explaining that the company reported regular tuck-in deals and staged stake increases every year.<\/p>\n\n\n\n

However, Verster said the broader Datatec story remained positive, supported by strong cash flow, dividends, share-price performance, and consistent management execution.<\/p>\n\n\n\n

\u201cCash flow was strong, and they are paying a special dividend, which is an indication thereof,\u201d he said.<\/p>\n\n\n\n

Verster said Datatec had performed well since selling the large Westcon business in the United States and focusing on remaining operations.<\/p>\n\n\n\n

He highlighted Westcon International and Logicalis as important parts of the group\u2019s progress since that transaction, with management executing well.<\/p>\n\n\n\n

Verster also noted that Montanana had continued buying Datatec shares and now owned approximately 20% of the company.<\/p>\n\n\n\n

\u201cIt\u2019s a very good story, but sometimes when a story has been so strong, it needs a bit of a breather,\u201d Verster said.<\/p>\n\n\n\n

He said the once-off items in the detailed results appeared to give the market an opportunity to pause after a strong run.<\/p>\n\n\n\n

\n\n\n\n

Datatec share price of the last two years<\/h2>\n\n\n\n
\"\"<\/figure>\n\n\n\n
\n","protected":false},"excerpt":{"rendered":"

Jean Pierre Verster said that Datatec’s latest results have given market an excuse to hit pause on its stock after a strong run.<\/p>\n","protected":false},"author":15,"featured_media":650365,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[80335],"tags":[2404,105530,2410,66174],"class_list":["post-650364","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-datatec","tag-jean-pierre-verster-2","tag-jens-montanana","tag-protea-capital-management"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/650364"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=650364"}],"version-history":[{"count":2,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/650364\/revisions"}],"predecessor-version":[{"id":652570,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/650364\/revisions\/652570"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/650365"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=650364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=650364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=650364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}