DTC - Datatec Limited - Audited Results for the Financial Year ended 29
16 May 2012 8:00
DTC
DTC                                                                             
DTC - Datatec Limited - Audited Results for the Financial Year ended 29         
February 2012 and Final Cash Distribution by way of Capital Reduction           
DATATEC LIMITED                                                                 
(Incorporated in the Republic of South Africa)                                  
(Registration number: 1994/005004/06)                                           
ISIN: ZAE000017745                                                              
Share Code: DTC                                                                 
AUDITED RESULTS FOR THE FINANCIAL YEAR ENDED 29 FEBRUARY 2012 AND FINAL CASH    
DISTRIBUTION BY WAY OF CAPITAL REDUCTION                                        
Datatec Limited ("Datatec" or the "Group", JSE and LSE: DTC), the               
international Information and Communications Technology (ICT) group, is today   
publishing its audited results for the financial year ended 29 February 2012.   
Financial highlights                                                            
Revenue up 17% to $5,03 billion (2011: $4,3 billion)                            
EBITDA up 34% to $190,2 million (2011: $142,2 million)                          
Cash generated from operations  $102,8 million (2011: $64,0 million utilised    
by operations)                                                                  
Underlying* earnings per share up 26% to 47,9 US cents (2011: 37,9 US cents)    
Capital distributions of 16 US cents per share for the year (2011: 13 US        
cents), including a final distribution of 9 US cents per share                  
* Excluding goodwill and intangibles impairment, amortisation of acquired       
intangible assets, acquisition-related adjustments, profit or loss on sale of   
assets and businesses, fair value movements on acquisition-related financial    
instruments and unrealised foreign exchange movements.                          
Operational highlights                                                          
- On-going strong performance and operational leverage                          
- Continued margin expansion; overall EBITDA margin 3,8% (2011: 3,3%)           
- Continuing to benefit from business diversification and international scale   
- Improved business mix and growing annuity income stream                       
- Logicalis and Westcon establish operations in Indonesia                       
Current trading and prospects                                                   
- Security, unified communications and data centre infrastructure continue to   
be the key solution drivers for growth. Risks remain in Europe, but a recovery  
in the US and strength in the rest of the world to support global growth        
- 2013 Financial Year forecast                                                  
> Revenues of between $5,5 billion and $5,8 billion (2012: $5,03 billion)       
> Underlying* earnings per share of approximately 55 US (2012:47,9 US cents)    
Jens Montanana, Chief Executive of Datatec, commented:                          
"I am delighted to report on another successful year for the Group. Our         
unrelenting focus on operational performance has meant that once again, we      
have been able to substantially increase revenues and expand margins,           
resulting in the bottom line growing at twice the rate of revenues.             
"Our global reach and diversity continues to serve us well, helping to          
insulate the Group against the challenging trading conditions in North America  
and Europe. South America and Asia Pacific remain our best performing markets,  
with Brazil, once again, doing exceptionally well.                              
"We have a mature and robust business model, which has become increasingly      
predictable and demonstrates defensive attributes in difficult economic         
circumstances. This gives us the confidence to continue our capital             
distribution to shareholders, having seven years of distributions and having    
paid our first interim distribution in November.                                
"We remain cautious about the near term. While Europe looks likely to remain    
challenging, we expect trading to improve in the US and a continued strong      
performance from our businesses in the rest of the world."                      
Profile and Group structure                                                     
Datatec Group is a global provider of ICT products, solutions and services,     
with approaching 6 000 people worldwide and with operations in over 40          
countries.                                                                      
The Group`s main lines of business comprise:                                    
> Technology division: global distribution of advanced networking, security     
and unified communications products ("Westcon")                                 
> Integration division: ICT infrastructure solutions and services               
("Logicalis")                                                                   
> Consulting division: strategic and technical consulting ("Consulting          
Services")                                                                      
"Corporate" encompasses the costs of the Group`s head office entities.          
OVERVIEW                                                                        
Datatec delivered a very strong performance during the 2012 financial year,     
with a substantial increase in revenues (up 17%), further margin expansion and  
a 34% increase in EBITDA.  This performance resulted in underlying earnings     
per share of 47,9 US cents, up 26% on the prior year, exceeding the underlying  
earnings per share guidance given at the start of the financial year by 1,9     
percentage points.                                                              
Datatec`s global reach and geographic diversity continues to be a strong        
asset, helping to mitigate the continuing challenging market conditions in the  
US and Europe, with a very strong performance in the Group`s operations in the  
rest of the world.  Brazil again performed exceptionally well.                  
North America remains the Group`s largest market, and whilst trading in that    
geography remained challenging, it continues to show signs of recovery.         
Trading conditions in Europe were subdued, with no real growth, but in line     
with expectations given the on-going economic turmoil in the Eurozone.  The UK  
in particular remained difficult, impacted by the weak economic environment.    
South America, Asia Pacific and the Middle East remain the Group`s strongest    
performing markets, with operations in South America enjoying an exceptional    
performance, largely driven by the economic success of Brazil.  The             
geographies outside the US and Europe now generate 33% of Datatec`s revenues    
and 40% of the Group`s gross profits, which serves to validate Datatec`s        
decision to diversify its operations beyond its predominantly US and European   
origins some years ago.                                                         
Datatec generated revenues of $5,03 billion, up 17% (2011: $4,30 billion),      
organic growth was 14%. Overall gross margins expanded slightly to 14,0%        
(2011: 13,9%).                                                                  
The Group continues to benefit strongly from operational leverage, with EBITDA  
increasing at twice the rate of revenues ($190,2 million, up 34% (2011: $142,2  
million)). Of the $5,03 billion revenues, some 74% came from Distribution       
(Westcon); 18% from ICT hardware and software Solutions (Logicalis) and 8% was  
attributable to revenues derived from Services (Logicalis and Consulting        
Services).                                                                      
Trading and profitability continued to improve in all of the Group`s            
divisions, driven by robust top line growth in both Westcon and Logicalis and   
an improving business mix.  Westcon benefited from its investment in higher     
margin products such as network security.  Logicalis enjoyed strong growth in   
its annuity revenues business.  The financial performance of Consulting         
Services continued to improve, largely as a result of some of the changes       
implemented in the prior year and better operational execution.  This division  
reported EBITDA of $4,8 million, up from $0.5 million in the prior year.        
Underlying earnings per share rose 26% to 47,9 US cents per share (2011: 37,9   
US cents).                                                                      
STRATEGY                                                                        
Datatec continues to pursue its long-term strategy to deliver sustainable       
above average returns to shareholders by focusing on a combination of organic   
growth in the faster-growing sectors of the ICT market, geographic expansion    
and earnings-enhancing acquisitions.                                            
Datatec enjoys a strong market position with no particular dependency on any    
single market, territory or technology sector, as well as improving customer    
mix.                                                                            
During the year the Group has primarily focused on improving operational        
performance, while pursuing a number of acquisition opportunities to enhance    
margins, extend the Group`s geographical reach or to strengthen its position    
in existing markets.                                                            
In April 2011, Logicalis acquired Inca Software, an IBM Cognos partner based    
in the UK. This was followed in July 2011 with the acquisition of Netarx, a     
Cisco Gold partner and provider of managed services, data centre and            
collaborative IT solutions to customers in the Mid-West USA.                    
During the year, Westcon made a number of acquisitions as part of a strategy    
of augmenting its security portfolio and extending the division`s reach into    
new markets.                                                                    
In August 2011, Westcon acquired entrada Kommunikations, a German-based, value- 
added distributor of IT security products, to significantly grow its German     
presence and enter the Swiss market.                                            
On 1 December 2011, Westcon acquired Sentronics SD, a distributor of IT         
physical security and video solutions.                                          
On 12 March 2012 Westcon acquired PT Netpoleon, an Indonesian value-added       
distributor of IT security, networking and convergence solutions.               
The acquisition of Netpoleon, which completed after the year end, was notable   
in that it gives Westcon its first significant presence in Indonesia, South     
East Asia`s most populous country and one of the region`s fastest growing       
economies. Logicalis has also entered the country by incorporating a new        
networking integration company, in partnership with PT Metrodata Electronics,   
Tbk.                                                                            
The Group will continue to seek to improve its competitive position and         
believes that the prevailing economic climate continues to provide attractive   
opportunities to enhance margins, facilitate consolidation in proven markets    
and extend the Group`s geographical reach.                                      
FINANCIAL RESULTS                                                               
Group revenues increased by 17% to $5,03 billion (2011: $4,3 billion) with 34%  
of Group revenue generated from North America (2011: 35%), 33% from Europe      
(2011: 36%), 12% from Asia Pacific (2011: 11%), 13% from South America (2011:   
11%) and 8% from AIME (2011: 7%).                                               
Gross margins improved to 14,0% (2011: 13,9%). Gross profit increased by 18%    
to $704,6 million (2011: $597,6 million), while operating costs increased at a  
lower rate than gross profit by 13% to $514,4 million (2011: $455,4 million).   
EBITDA increased 34% to $190,2 million (2011: $142,2 million), which includes   
net unrealised foreign exchange gains of $0,5 million (2011: $0,4 million       
losses). Depreciation was $23,9 million (2011: $21,0 million). Amortisation of  
intangible fixed assets arising from acquisitions was $15,7 million (2011:      
$16,2 million).                                                                 
Operating profit increased by 43% to $150,6 million (2011: $105,0 million).     
The net interest charge increased to $14,3 million (2011: $10,2 million), as a  
result of Westcon`s utilisation of prompt pay arrangements and funding of       
working capital growth.                                                         
Profit before tax increased 76,5% to $138,0 million (2011: $78,2 million),      
after fair value movements on acquisition-related financial instruments.        
The Group`s reported effective tax rate decreased to 35,4% from 41,2%. The      
normalised effective tax rate was 35,1% (2011: 34,7%). The Group`s effective    
tax rate is higher than the South African statutory tax rate of 28%, primarily  
due to profits in jurisdictions with higher effective tax rates, most notably   
North and South America. The higher effective tax rate in the current year is   
due to a larger contribution to profits from these jurisdictions.               
The effective tax rate for the financial year ending 28 February 2013 is        
expected to be approximately 33%.                                               
Underlying earnings per share increased by 26% to 47,9 US cents (2011: 37,9 US  
cents). Headline earnings per share ("HEPS") increased by 80% to 43,1 US cents  
(2011: 23,9 US cents). HEPS, excluding the effect of acquisition-related fair   
value adjustments, is 42,9 US cents (2011: 31,9 US cents), reflecting an        
increase of 34%.                                                                
Consistent with the prior year, Westcon is taking advantage of vendor supplier  
prompt pay initiatives, which are earnings enhancing.                           
The Group`s operations generated $102,8 million cash during the period (2011:   
cash utilised of $64,0 million).                                                
The Group ended the period with net debt of $20,5 million (2011: net cash of    
$48,1 million), after deducting long-term debt of $13,9 million and short-term  
debt of $8,4 million included in the payables and provisions line on the        
statement of financial position. The Group continues to enjoy comfortable       
headroom in terms of its working capital lines.                                 
The Group issued 0,9 million new shares during the year, with 0,6 million       
shares issued as part of acquisition activities, while 0,3 million shares were  
issued to satisfy exercised share options.                                      
The fair value of companies acquired during the year was $54,7 million. As a    
result goodwill and intangible assets increased by $48,5 million and $13,9      
million respectively. The revenue and EBITDA included from these acquisitions   
in 2012 was $93,2 million and $2,5 million respectively. Had the acquisition    
dates been 1 March 2011, revenue attributable to these acquisitions would have  
been approximately $145,4 million. It is not practical to establish the EBITDA  
that would have been contributed by the acquisitions in 2012 if they had been   
included for the entire year.                                                   
The Group paid $24,2 million to shareholders as a capital distribution in July  
2011 relating to the 2011 financial year. The Group paid its first interim      
capital distribution to shareholders for the 2012 financial year in November    
2011 of $12,2 million.                                                          
The put option liability for Promon Logicalis Latin America Limited ("PLLAL")   
of $45 million was reversed to reserves during the first half of the year       
pursuant to the cancellation of the put option.                                 
Losses of $13,8 million (2011: $32,4 million gains) arising on translation to   
presentation currency are included in comprehensive income of $77,0 million     
(2011: $76,4 million).                                                          
DIVISIONAL REVIEWS                                                              
Westcon                                                                         
Westcon accounted for 74% of the Group`s revenues (2011: 74%) and 64,9% of its  
EBITDA (2011: 66,3%).                                                           
Westcon is the world`s leading specialty distributor in networking, security,   
mobility and convergence for leading technology vendors, including Cisco,       
Avaya, Check Point, Bluecoat, Juniper and other complementary manufacturers.    
Through its Comstor, Westcon Convergence and Westcon Security business units,   
Westcon sells products and services to resellers, systems integrators and       
service providers.                                                              
Westcon has particular expertise in the convergence of voice, data and video    
applications and technologies, including Voice-over Internet Protocol           
("VoIP"), security for networking and communications systems, data centre       
technologies, videoconferencing and wireless connectivity.                      
The solid financial performance reported by Westcon during the previous         
financial year continued during this year, with both revenues and               
profitability showing an improvement over the prior year. Overall revenues      
increased 17% to $3,7 billion (2011: $3,2 billion) with increases across all    
regions. Westcon acquisitions contributed $42 million in revenue, resulting in  
an increase in organic revenue of 16%.                                          
From a geographic perspective, 35% of Westcon`s revenue was generated in        
Europe (2011: 39%), 35% in North America (2011: 35%), 13% in Asia Pacific       
(2011: 11%), 11% in Africa, India and Middle East ("AIME") (2011: 9%) and 6%    
in South America (2011: 6%).                                                    
Gross margins increased to 10,7% (2011: 10,5%) with increased margins in        
Europe and South America offset by lower margins in North America, AIME and     
Asia Pacific. Overall gross margins improved as a result of a more favourable   
product mix, which saw Cisco products make up 51% of Westcon`s revenue (2011:   
52%), 15% for Avaya/Nortel (2011: 16%), 19% for security (2011: 17%) and 15%    
for Affinity/other development vendors (2011: 15%). Gross profit increased 19%  
to $399,6 million (2011: $334,4 million).                                       
Operating expenses grew 16% to $266,3 million due to increased headcount        
levels and higher outbound freight expenses. Operating expenses grew at a       
lower rate than gross profit. As a result, Westcon`s EBITDA increased 27% to    
$133,3 million (2011: $105,3 million) while EBITDA margins increased to 3,6%    
(2011: 3,3%), with increased margins in Europe and South America offset by      
lower margins in Asia Pacific and AIME and consistent results in North          
America.                                                                        
Operating profit increased 32% to $120,4 million (2011: $91,3 million).         
Westcon continued its strong working capital management during the year.        
In August 2011, Westcon acquired entrada Kommunikations, the second largest     
distributor of security products in Germany, adding considerable strength to    
its German IT security practice.                                                
In December 2011, Westcon acquired Sentronics SD, a value-added distributor of  
electronic video and security equipment in South Africa.                        
On 12 March 2012 Westcon completed the acquisition of PT Netpoleon, an          
Indonesian value-added distributor of IT security, networking and convergence   
solutions.                                                                      
Westcon is in the process of transitioning its existing global ERP system to a  
new SAP-based platform. The upgrade is part of a program to improve and         
optimise Westcon`s systems and infrastructure capabilities in support of its    
growing business and increasing transaction volumes. Of this year`s increase    
in capitalised development expenditure, $20 million is attributable to this     
ERP system transition.                                                          
Management expects double digit revenue growth for the 2013 financial year,     
with margin expansion, improving product mix and broadening geographic reach.   
Logicalis                                                                       
Logicalis accounted for 25% of the Group`s revenues (2011: 24%) and 32,8% of    
its EBITDA (2011: 33,4%).                                                       
Logicalis is an international IT solutions and managed services provider with   
a breadth of knowledge and expertise in IT infrastructure and networking        
solutions, communications and collaboration, data centre and cloud services,    
and managed services.                                                           
Overall revenues and profits in the second half of the financial year were      
higher than in the first half. The South America region in particular had an    
exceptionally strong performance, as telecommunication service providers        
continue to invest in their core infrastructures. The UK and US markets were    
more challenging.                                                               
Revenue increased by 18% to $1,23 billion (2011: $1,05 billion), including      
$48,6 million of revenue from the acquisitions made during the year. Organic    
revenue increased by 11%, benefiting from the high growth rate in South         
America.                                                                        
Revenues from product sales were up 13%, with robust increases in the Cisco     
and HP vendor categories. Revenues from total services were up 36% and strong   
growth in annuity service revenues of 41% reflected the long-term strategic     
focus on this segment of the business with investments made in data centre and  
cloud-based services assets.                                                    
The gross margin was slightly lower at 22,5% (2011: 23,0%). Both product and    
services margins were down slightly. The gross profit was up 15% to $277,4      
million (2011: $240,7 million). Improved operational leverage resulted in       
operating expenses increasing by only 12%. EBITDA increased 27% to $67,4        
million (2011: $53,0 million), resulting in an EBITDA margin of 5,5% (2011:     
5,1%).                                                                          
After charges for depreciation and amortisation of intangible assets,           
operating profit was up 36% to $42,6 million (2011: $31,3 million).             
During the first half of the financial year, Logicalis completed two            
acquisitions to consolidate its position in the UK and US respectively. In      
April 2011, Logicalis acquired Inca Software, an IBM Cognos partner and in      
July 2011, it acquired Netarx, a Cisco Gold partner and provider of managed     
services, data centre and collaborative IT solutions to customers in the US     
Mid-West.                                                                       
During the year the Group incorporated a new company in Indonesia focused on    
network integration. The Indonesian company, which commenced trading in         
January 2012, has a 49% partner, PT Metrodata Electronics, Tbk.                 
On 31 August 2011, Logicalis sold 10% of the share capital in PLLAL to its      
partner in South America, Promon SA. Logicalis first partnered with Promon in   
May 2008 and formed PLLAL to develop its existing South American business.      
Since then the business has gone from strength to strength. Promon has now      
committed to the long-term future of PLLAL by acquiring a further 10% interest  
in the business for $15 million in cash, increasing its share of the business   
to 40%. As a result Datatec`s equity ownership of PLLAL through Logicalis       
reduced to 60%, with effect from 31 August 2011.                                
The outlook in South America and Asia Pacific regions remains positive.         
Although US economic data is indicating a slow recovery, the UK market remains  
challenging. Logicalis expects to continue investing in cloud and data centre   
services and continues to evaluate acquisition opportunities in existing        
markets. Logicalis expects to deliver continuing growth in the 2013 financial   
year, with a seasonally stronger second half, compared to the first half.       
Consulting Services                                                             
The Consulting Services division, comprising the majority-owned businesses      
Analysys Mason, Intact, Via Group, and an equity stake in Cornwall Energy,      
accounted for 2% of Group revenues (2011: 2%) and 2,3% of EBITDA (2011: 0,3%).  
Analysys Mason delivers management consulting, advisory, modelling and market   
intelligence services to the telecoms, IT and digital media industries. The     
company`s clients include telecoms operators, financial institutions, media     
organisations, regulators and a range of other public sector bodies.            
Intact is a services and support consultancy delivering high-end professional   
services in networking, unified communications, security, wireless and data     
centre technologies. Intact`s services are offered exclusively through its      
partner network, which include value-added resellers, systems integrators,      
network integrators and service providers.                                      
On 2 October 2011, Datatec acquired a further stake in Via Group ("Via") to     
achieve effective control of this Texas-based business. Via is a recognised     
leader in providing professional services supporting Avaya and Microsoft-based  
unified communications solutions.                                               
Cornwall Energy provides participants in and customers of the energy markets    
with research and consulting services focusing on electricity generation and    
distribution, including renewable energy, and smart grids (intelligent          
networked distribution).                                                        
Total divisional revenues increased by 10% to $79,4 million (2011: $72,5        
million) due to a combination of organic growth in the US and the first-time    
inclusion of Via.                                                               
Better utilisation of consultants and internal restructuring activities helped  
to increase EBITDA to $4,8 million (2011: $0,5 million).                        
Stable revenues are anticipated for the 2013 financial year, with continued     
improved operating performance. Advanced mobility and broadband services are    
continuing to create opportunities for this division.                           
Corporate                                                                       
Corporate encompasses the net operating costs of the Datatec head office        
entities of $17,1 million (2011: $15,7 million) and unrealised and realised     
foreign exchange gains of $0,2 million and $1,6 million respectively (2011:     
losses of $0,2 million and $0,8 million respectively). The increase in head     
office costs is mainly attributable to transaction-related expenses, marketing  
campaigns in support of Datatec`s 25th year anniversary and an increased focus  
on raising our international visibility.                                        
REPORTING                                                                       
The condensed financial information has been prepared in accordance with the    
framework concepts and the measurement and recognition requirements of          
International Financial Reporting Standards ("IFRS") of the International       
Accounting Standards Board, the AC 500 standards as issued by the Accounting    
Practices Board, and the information as required by IAS 34: Interim Financial   
Reporting and the requirements of the Companies Act of South Africa. The        
report has been prepared using accounting policies that comply with IFRS which  
are consistent with those applied in the financial statements for the year      
ended 28 February 2011. The preparation of the Group`s consolidated year end    
results for financial year ended 29 February 2012 was supervised by the Chief   
Financial Officer, Ivan Dittrich. These results have been audited in            
compliance with any applicable requirements of the Companies Act of South       
Africa.                                                                         
The auditors, Deloitte & Touche, have issued an unmodified opinion on the       
Group`s financial statements for the year ended 29 February 2012. The audit     
was conducted in accordance with International Standards on Auditing. These     
condensed financial statements have been derived from the audited Group         
financial statements and are consistent in all material respects, with the      
Group financial statements. A copy of their audit report is available for       
inspection at the Company`s registered office. Any reference to future          
financial performance included in this announcement, has not been reviewed or   
reported on by the Company`s auditors.                                          
SUBSEQUENT EVENTS                                                               
On 12 March 2012, Westcon completed the acquisition of PT Netpoleon, an         
Indonesian value-added distributor of IT security, networking and convergence   
solutions and provider of managed and training services. Netpoleon achieved     
unaudited revenues for the year ended 31 December 2011 of $11 million.          
On 1 May 2012, Logicalis agreed to acquire Corpnet, an Australian IT solutions  
provider based in Brisbane. Corpnet is one of the leading providers of IT       
solutions (including data centre and cloud managed service solutions) to the    
mid-sized and enterprise markets in Queensland and has annualised revenues of   
approximately $20 million. The acquisition brings complementary skills and      
resources which will build upon Logicalis` existing data centre and managed     
services expertise in Australia.                                                
CURRENT TRADING AND PROSPECTS                                                   
Despite difficult economic conditions in certain markets in which the Group     
operates, companies` balance sheets generally remain strong and technology      
spending continues to be healthy. Security, unified communications and data     
centre infrastructure continue to be the key drivers for growth in our          
industry. Although risks remain in Europe, the Board expects a recovery in the  
US and strength in the rest of the world to support global growth.              
Based on current trading conditions and prevailing exchange rates, the Board    
expects revenues for the 2013 financial year of between $5,5 billion and $5,8   
billion. The Board expects underlying* earnings per share to be approximately   
55 US cents and both earnings per share** and headline earnings per share** to  
be approximately 50 US cents. Profit after tax** is expected to be              
approximately $104 million. The financial information on which this forecast    
is based has not been reviewed and reported on by Datatec`s external auditors.  
DIRECTORATE                                                                     
Rob Evans was appointed as a Director of the Board of Datatec with effect from  
1 May 2012 and Ivan Dittrich will leave the Board on 1 June 2012, at which      
point Rob Evans will succeed him as Chief Financial Officer.                    
DIVIDEND/CAPITAL DISTRIBUTION POLICY                                            
During the financial year ended 29 February 2012, the Group`s dividend/capital  
distribution policy was amended from making a single annual payment to making   
both an interim and final distribution. The dividend cover policy of at least   
three times relative to underlying* earnings per share now applies to both      
interim and final distributions.                                                
CASH DISTRIBUTION BY WAY OF CAPITAL REDUCTION                                   
The Group paid an interim capital distribution to shareholders of 56 RSA cents  
(approximately 7 US cents) per share on 28 November 2011. The Group has         
declared and will distribute to shareholders a final capital reduction in lieu  
of a dividend out of share premium (a reduction of Contributed Tax Capital) of  
75 RSA cents per share (approximately 9 US cents per share), making a total     
capital distribution to shareholders for the financial year ended 29 February   
2012 of 131 RSA cents (approximately 16 US cents) per share.                    
The salient dates will be as follows:                                           
Last day to trade   Friday, 6 July 2012                                         
Shares to commence trading "ex" the distribution  Monday, 9 July 2012           
Record date    Friday, 13 July 2012                                             
Payment date   Monday, 16 July 2012                                             
The final capital distribution will be paid to shareholders on the Jersey       
branch register in GBP translated at the closing exchange rate on Wednesday 11  
July 2012. Share certificates may not be dematerialised or rematerialised       
between Monday, 9 July 2012 and Friday, 13 July 2012, both days inclusive.      
On behalf of the Board:                                                         
SJ Davidson    JP Montanana   IP Dittrich                                       
Chairman  Chief Executive Officer  Chief Financial Officer                      
16 May 2012                                                                     
*Excluding goodwill and intangibles impairment, amortisation of acquired        
intangible assets, acquisition-related adjustments, 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 (including put option liabilities), which are     
required under IFRS.                                                            
Condensed Group statement of comprehensive    Audited      Audited              
income for the year ended 29 February 2012    year ended   year ended           
                                            February     February               
                                            2012         2011                   
USD`000      USD`000                
Revenue                                        5 033 394    4 302 972           
Existing operations                            4 940 164    4 293 955           
Acquisitions                                   93 230       9 017               
Cost of sales                                 (4 328 814)  (3 705 417)          
Gross profit                                   704 580      597 555             
Operating costs                               (514 974)    (454 949)            
Unrealised foreign exchange gains/(losses)     585         (425)                
Operating profit before finance costs,         190 191      142 181             
depreciation and amortisation ("EBITDA")                                        
Depreciation                                  (23 861)     (21 045)             
Amortisation of acquired intangible assets    (15 686)     (16 160)             
Operating profit                               150 644      104 976             
Interest income                                7 623        6 030               
Financing costs                               (21 905)     (16 210)             
Acquisition-related fair value adjustments     402         (14 701)             
Fair value movements on put option             16           (14 701)            
liabilities                                                                     
Fair value adjustments on deferred purchase    386         -                    
consideration                                                                   
Share of equity-accounted investments          425          118                 
earnings                                                                        
Other income                                   782         -                    
Loss on disposal of investments               -             (2 035)             
Profit before taxation                         137 971      78 178              
Taxation                                      (48 902)     (32 238)             
Profit for the year                            89 069       45 940              
Other comprehensive income                                                      
Exchange differences arising on translation   (13 778)      32 399              
to presentation currency                                                        
Translation of equity loans net of tax effect  4 615       (2 732)              
Other items                                   (2 856)       809                 
Total comprehensive income for the  year       77 050       76 416              
Profit attributable to:                                                         
Owners of the parent                           80 846       41 893              
Non-controlling interest                       8 223        4 047               
89 069       45 940               
Total comprehensive income attributable to:                                     
Owners of the parent                           72 282       70 346              
Non-controlling interest                       4 768        6 070               
77 050       76 416               
Number of shares issued (millions)                                              
Issued                                         188          186                 
Weighted average                               186          184                 
Diluted weighted average                       189          187                 
Earnings per share ("EPS") (US cents)                                           
Basic EPS                                     43,5         22,8                 
Diluted basic EPS                             42,8         22,4                 
SALIENT FINANCIAL FEATURES                                                      
Headline earnings                              80 188       44 020              
Headline earnings per share (US cents)                                          
Headline                                      43,1         23,9                 
Diluted headline                              42,5         23,5                 
Underlying earnings                            89 166       69 705              
Underlying earnings per share (US cents)                                        
Underlying                                    47,9         37,9                 
Diluted underlying                            47,2         37,3                 
Net asset value per share (US cents)          438,6        392,1                
KEY RATIOS                                                                      
Gross margin (%)                              14,0         13,9                 
EBITDA (%)                                    3,8          3,3                  
Effective tax rate (%)                        35,4         41,2                 
Normalised effective tax rate (%)             35,1         34,7                 
Exchange rates                                                                  
Average Rand/USD exchange rate                7,3          7,2                  
Closing Rand/USD exchange rate                7,5          7,0                  
Condensed Group statement of financial        Audited      Audited              
position as at 29 February 2012               year ended   year ended           
February     February               
                                            2012         2011                   
                                            USD`000      USD`000                
ASSETS                                                                          
Non-current assets                             574 970      515 590             
Property, plant and equipment                  55 145       52 915              
Capitalised development expenditure            34 117       15 570              
Goodwill                                      377 869       338 320             
Acquired intangible assets                     41 772       43 796              
Investments                                    5 709        7 914               
Deferred taxation assets                       37 229       35 966              
Other receivables and prepayments              23 129       21 109              
Current assets                                 1 823 437    1 481 342           
Inventories                                    412 115      299 460             
Trade and other receivables                    1 163 534    944 230             
Cash and cash equivalents                      247 788      237 652             
Total assets                                   2 398 407    1 996 932           
EQUITY AND LIABILITIES                                                          
Ordinary shareholders` funds                   823 369      727 702             
Non-controlling interest                       56 059       42 677              
Total equity                                   879 428      770 379             
Non-current liabilities                        66 083       91 102              
Long-term liabilities                          13 915       21 171              
Amounts owing to vendors                       2 057        26 353              
Liability for share-based payment              10 423       9 467               
Deferred taxation liabilities                  39 688       34 111              
Current liabilities                            1 452 896    1 135 451           
Payables and provisions                        1 187 967    935 227             
Amounts owing to vendors                       14 327       33 132              
Taxation                                       4 627        12 659              
Bank overdrafts                                245 975      154 433             
Total equity and liabilities                   2 398 407    1 996 932           
Capital expenditure incurred in current year   43 053       30 610              
(including capitalised development                                              
expenditure)                                                                    
Capital commitments at end of year             10 142       23 160              
Lease commitments at end of year               98 213       93 412              
Payable within one year                        27 516       22 858              
Payable after one year                         70 697       70 554              
Condensed Group statement of cash flows for   Audited      Audited              
the year ended 29 February 2012               year ended   year ended           
                                            February     February               
                                            2012         2011                   
                                            USD`000      USD`000                
EBITDA                                         190 191      142 181             
(Profit)/loss on disposal of property, plant  (733)         67                  
and equipment                                                                   
Non-cash items                                (832)        (1 172)              
Cash generated before working capital changes  188 626      141 076             
Working capital changes                       (85 783)     (205 106)            
Increase in inventories                       (109 479)    (11 051)             
Increase in receivables                       (188 004)    (80 441)             
Increase/(decrease) in payables                211 700     (113 614)            
Cash generated from/(utilised by) operations   102 843     (64 030)             
Net finance costs paid                        (14 282)     (10 180)             
Taxation paid                                 (55 619)     (26 687)             
Net cash inflow/(outflow) from operating       32 942      (100 897)            
activities                                                                      
Cash outflows for acquisitions                (27 521)     (14 705)             
Net cash outflow from other investing         (42 943)     (31 295)             
activities                                                                      
Net cash inflow from disposal of operations    14 988      -                    
and investments                                                                 
Net cash (outflow)/inflow from other          (27 684)      6 677               
financing activities                                                            
Capital distribution to shareholders          (36 383)     (21 713)             
Net decrease in cash and cash equivalents     (86 601)     (161 933)            
Cash and cash equivalents at the beginning of  83 219       239 834             
year                                                                            
Translation differences on opening cash        5 195        5 318               
position                                                                        
Cash and cash equivalents at the end of year   1 813        83 219              
(*)                                                                             
(*) Comprises cash resources, net of bank overdrafts and trade                  
finance advances.                                                               
Condensed Group statement of changes in total Audited      Audited              
equity for the year ended 29 February 2012    year ended   year ended           
                                            February     February               
                                            2012         2011                   
                                            USD`000      USD`000                
Balance at beginning of the year               770 379      718 779             
Total comprehensive income                     77 050       76 416              
New share issues                               3 545        13 694              
Capital distribution to shareholders          (36 383)     (21 713)             
Equity-settled deferred purchase               6 667       -                    
consideration                                                                   
Share-based payments                          (165)         277                 
Derecognition of put option liability          45 000      -                    
Acquisitions                                  (815)        (2 781)              
Disposals                                      5 536       -                    
Non-controlling interest                       8 614       (14 293)             
Balance at end of the year                     879 428      770 379             
Determination of headline and underlying      Audited      Audited              
earnings for the year ended 29 February 2012  year ended   year ended           
                                            February     February               
                                            2012         2011                   
USD`000      USD`000                
Profit attributable to equity holders of the   80 846       41 893              
parent                                                                          
Headline earnings adjustments                                                   
(Profit)/loss on disposal of property, plant  (733)         2 103               
and equipment and investments                                                   
Tax effect                                     75           24                  
Headline earnings                              80 188       44 020              
DETERMINATION OF UNDERLYING EARNINGS                                            
Underlying earnings adjustments                14 459       31 286              
Unrealised foreign exchange (gains)/losses    (585)         425                 
Fair value movements on acquisition-related   (402)         14 701              
financial instruments                                                           
Acquisition-related adjustment                (240)        -                    
Amortisation of intangible assets              15 686       16 160              
Tax effect                                    (5 472)      (5 559)              
Non-controlling interest                      (9)          (42)                 
Underlying earnings                            89 166       69 705              
Segmental analysis for the year ended 29      Audited      Audited              
February 2012                                 year ended   year ended           
February     February               
                                            2012         2011                   
                                            USD`000      USD`000                
Revenue                                                                         
Westcon                                        3 719 636    3 184 042           
Logicalis                                      1 234 334    1 046 422           
Consulting Services                            79 424       72 508              
Revenue from continuing operations             5 033 394    4 302 972           
EBITDA                                                                          
Westcon                                        133 257      105 328             
Logicalis                                      67 395       53 032              
Consulting Services                            4 778        541                 
Corporate                                     (15 239)      (16 720)            
EBITDA from continuing operations              190 191      142 181             
Operating profit                                                                
Westcon                                        120 360      91 277              
Logicalis                                      42 609       31 340              
Consulting Services                            3 331       (764)                
Corporate                                     (15 656)     (16 877)             
Operating profit from continuing operations    150 644      104 976             
Total assets                                                                    
Westcon                                        1 529 565    1 284 221           
Logicalis                                      801 493      641 912             
Consulting Services                            53 527       48 554              
Corporate                                      13 822       22 245              
Total assets                                   2 398 407    1 996 932           
Directors                                                                       
SJ Davidson* (Chairman), JP Montanana (CEO), IP Dittrich (CFO),                 
RP Evans, O Ighodaro*#, JF McCartney*+, LW Nkuhlu*, CS Seabrooke*,              
NJ Temple*                                                                      
British  *Non-executive  +American  #Nigerian                                   
Enquiries                                                                       
Datatec Limited (www.datatec.co.za)                                             
Jens Montanana, Chief Executive Officer      +44 (0) 1753 797118                
Ivan Dittrich, Chief Financial Officer       +27 (0) 11 233 1221                
Wilna de Villiers, Group Marketing Manager   +27 (0) 11 233 1013                
Jefferies Hoare Govett - Nominated Adviser and Broker                           
Nick Adams/Tom Rider          +44 (0) 20 7029 8000                              
finnCap - Broker                                                                
Tom Jenkins/Henrik Persson         +44 (0) 20 7220 0500                         
College Hill                                                                    
Adrian Duffield/Rozi Morris (UK)             +44 (0) 20 7457 2020               
Frederic Cornet/Morne Reinders (SA)          +27 (0) 11 447 3030                
Sponsor                                                                         
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Date: 16/05/2012 08:00:05 Produced by the JSE SENS Department.                  
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