DTC - Datatec Limited - Interim Management Statement
15 July 2010 8:00
DTC
DTC                                                                             
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 an   
IMS (Interim Management Statement) covering the period from 1 March 2010 to 30  
June 2010 ("the Period").                                                       
Group                                                                           
Trading and profitability are continuing to improve in all of the Group`s       
divisions.  Revenues and operating profits in the Period have improved in       
comparison with the four months ended 30 June 2009 ("the Comparative Period").  
This is driven in particular by the continuing recovery in the US, stable       
conditions in Europe and resilient performance in Asia. Brazil remains the most 
promising of the major emerging economies in which the Group operates.          
Overall gross margins have remained stable and the Group continues to benefit   
from operational gearing. Operating costs remain tightly controlled and the     
Group remains vigilant to any interruption in the overall global economic       
recovery.                                                                       
On 13 May 2010 the Group published a forecast for the financial year ending 28  
February 2011 of revenues of between $4.1 billion and $4.4 billion, profit after
tax** of approximately $58 million, underlying* earnings per share of           
approximately 35 US cents and earnings** and headline earnings** per share of   
approximately 30 US cents. Based on current exchange rates and trading          
conditions, these forecasts remain unchanged.                                   
Jens Montanana, Chief Executive Officer said:                                   
"We are delighted to report that the improvement in trading and profitability   
reported at our recent full year results has continued in all of the Group`s    
divisions. We remain cautiously optimistic for the year, in line with our       
previously published forecasts."                                                
Westcon and Westcon Emerging Markets                                            
Westcon`s solid financial performance during the previous financial year is     
continuing, with trading in all regions showing an improvement over the         
Comparative Period. Trading increased in North America, Europe and Asia Pacific,
while trading in Latin America was particularly strong. Westcon produced its    
fourth consecutive quarter of revenue growth during the first quarter of the    
current financial year. Gross margins remain in line with historical trading    
norms.                                                                          
Westcon Emerging Markets (Africa, Middle East and India) is continuing to trade 
well with an improved performance over the Comparative Period.                  
Supply constraints, existing at the previous financial year end, have eased and 
product lead times are improving.                                               
As anticipated, extended credit terms from suppliers during the previous        
financial year have now been reduced to normal levels, resulting in a           
consumption of working capital.  Separately, Westcon is looking at earnings     
enhancing re-financing activities by taking advantage of vendor supplier prompt 
pay arrangements. These activities will reduce Westcon`s net cash position over 
time.                                                                           
Logicalis                                                                       
The steadily improving performance of Logicalis from the end of the previous    
financial year continued during the Period with revenues, gross and operating   
margins all improving  relative to the Comparative Period.  In particular,      
profitability in the US has improved, on the back of continued recovery and an  
overall increase in the proportion of services in the revenue mix. Demand in    
South America has strengthened and Asia Pacific is performing strongly. The UK  
is performing satisfactorily, although the long term impact of government       
austerity measures in the UK is unclear.                                        
Consulting Services                                                             
Trading and profitability have improved over the Comparative Period, with an    
encouraging performance from Analysys Mason and an increased order backlog from 
the Intact business. Asia is delivering the best relative performance in this   
division.                                                                       
Interim results                                                                 
The Group expects to release its interim results for the six months ending 31   
August 2010 on Wednesday 13 October 2010.                                       
The financial information on which this statement is based has not been reviewed
and reported on by Datatec`s auditors.                                          
* Underlying earnings per share excludes goodwill and intangibles impairment,   
amortisation of acquired intangible assets, profit or loss on sale of assets and
businesses, fair value movements on acquisition related financial instruments   
and unrealised foreign exchange movements.                                      
** Forecasts for profit after tax, earnings per share and headline earnings per 
share do not take into account any fair value gains or losses on acquisition    
related financial instruments, which are required under IFRS.                   
ENDS                                                                            
Enquiries:                                                                      
Datatec Limited  (www.datatec.co.za)                                            
Ivan Dittrich - Chief Financial Officer         +27 11 233 1221                 
                                                                                
Jefferies International Limited                                                 
Chris Snoxall /  Andrew Kenny                   +44  20 7029 8000               
                                                                                
College Hill                                                                    
Adrian Duffield/Jon Davies (UK)                 +44  20 7457 2020               
Fred Cornet                                     +27  11 447 3030                
15 July 2010                                                                    
Sponsor                                                                         
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Date: 15/07/2010 08:00:06 Produced by the JSE SENS Department.                  
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