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DTC - Datatec Limited - Interim management statement
DATATEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
INTERIM MANAGEMENT STATEMENT
Datatec, ("Datatec" or the "Group", JSE and LSE: DTC), the international
Information and Communications Technology (ICT) group, is today publishing its
first interim management statement* (IMS), covering the period from 1 September
2007 to 31 December 2007.
Group
Group trading in the first four months of the second half of the financial year
has been much stronger than the first half, with significant improvements in the
performance of Logicalis in particular, as a consequence of the restructuring
undertaken in the US in August 2007. The Group is on course to produce a strong
second half performance and full year results in line with expectations.
Group revenues and profitability for the 10 months to 31 December 2007 improved
in all areas when compared with the prior year`s first 10 months. Continuing
good demand for the Group`s technology solutions and services, coupled with a
seasonally normally stronger second half performance, indicate that all
divisions are positioned to deliver full year-on-year growth.
Both gross and operating profit margins have also improved in the second half,
as a result of continuing favourable demand for the Group`s products and
services, wider geographic reach and a strategy that has resulted in an improved
product mix, a better balance between vendors and continued growth in services.
The Board is confident that the Group will meet its target of achieving over
$4bn in revenues for the current financial year to 29 February 2008. (FY07:
$3bn). The Group continues to execute a tightly controlled approach to managing
its operating costs.
Westcon
Revenues have continued to grow in all regions with gross margins and operating
profit margins expanding. The contribution from new initiatives in developing
countries in Eastern Europe and South America is expected to grow rapidly. As
earlier reported Westcon has recently also established a Cisco distribution
presence in Brazil. This new operation has the potential to grow rapidly and
report incremental revenues of over $100m over the next two years.
Logicalis
The early decision by management to restructure the US operations in response to
the overall slowing of the market in the first half, has resulted in a
significant improvement in second half profitability. A strong second half
performance in all regions is expected to produce a record performance for this
division.
A number of long-term annuity deals, such as the $150m contract with the Welsh
Assembly Government (the largest ever contract awarded to Logicalis UK),
exemplify Logicalis` growing services capabilities. We continue to look for
opportunities in high growth markets and recently acquired the remaining 20%
interest in Logicalis South America.
AnalysysMason
The consulting group has had a robust second half so far and is expected to
produce year on year growth. The investments made in the early part of the year,
within the research division, are starting to yield positive results. This area
of the business is expected to contribute increasing profitability from next
year.
Middle East and Africa
This division continues to grow revenues strongly. New countries across Africa,
the Middle East and within emerging Asia are being targeted for further
investment.
Preliminary results
The Group expects to release its preliminary results for the year to 29 February
2008 on Wednesday 14 May 2008.
The financial information on which this statement is based has not been reviewed
and reported on by Datatec`s auditors.
Datatec Limited (www.datatec.co.za)
David Pfaff, Group Finance Director +44 (0) 17537 97111
Dresdner Kleinwort
Simon Russell/Andrew Holloway +44 (0) 20 7623 8000
College Hill
Adrian Duffield/Jon Davis +44 (0) 20 7457 2020
Nick Williams/Fred Cornet (SA press) +27 11 447 3030
15 January 2008
Note to Editors
Datatec Limited is an international Information & Communications Technology
(ICT) group focused on the supply of advanced ICT and the delivery of
professional services into the higher growth segments of the global market. The
Group`s main lines of business comprise the global distribution of advanced
networking and communications convergence products (Westcon Group Inc), IT
infrastructure solutions and network integration (Logicalis Ltd) and strategic
telecommunications consulting (Analysys Mason Group Ltd). Datatec is registered
in South Africa and its shares are listed in Johannesburg and London. The Group
has more than 3,000 employees around the world.
In the year to 28 February 2007, the Group reported an increase in revenue of
17% to $3.2 billion (2006 restated: $2.7 billion), operating profit increased
45% to $100 million (2006: $69 million), and headline earnings per share grew to
40.80 cents (2006: 26.9 cents).
*An Interim Management Statement (IMS) is a statement that the UK Financial
Services Authority now requires UK companies fully listed on the London Stock
Exchange to issue during the first six-month period of the financial year and
another statement during the second six month period of the financial year.
This statement must be made in a period between ten weeks after the beginning,
and six weeks before, the end of the relevant six-month period.
Although Datatec is listed on AIM in London, the Board has decided to publish
IMS statements in order to provide the financial markets with regular update on
the Group`s trading performance. The Group plans to publish its IMS statements
in January and July each year.
Date: 15/01/2008 09:00:01 Produced by the JSE SENS Department.
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