DTC 201405140012A
Reviewed provisional results for the financial year ended 28 February 2014
and final cash distribution
Datatec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
Reviewed provisional results for the financial year ended 28 February 2014
and final cash distribution
Datatec Limited (“Datatec” or the “Group"), the international information
and communications technology (ICT) group, is today publishing its reviewed condensed
consolidated results for the financial year ended 28 February 2014.
Results summary
• Revenue up 8% to $5,69 billion (2013: $5,25 billion)
• Gross profit increased by 8% to $841,4 million (2013: $780,3 million)
• EBITDA of $175,3 million (2013: $185,5 million)
• Underlying* earnings per share of 35,7 US cents (2013: 43,1 US cents)
• Capital distribution maintained at 17 US cents per share for the full year (2013: 17 US cents)
• Westcon: new leadership team and re-organisation implemented
• Logicalis: transforming into services-based business
Current trading and outlook
• Uneven global recovery
• Westcon management focused on improving operational efficiency
• Logicalis well positioned for industry evolution
• 2015 financial year forecast:
• Revenues in excess of $6 billion
• Underlying* earnings per share of more than 40 US cents
*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
Jens Montanana, Chief Executive of Datatec, commented:
“We continued to grow revenue and our gross margins have been stable. Logicalis had a notably strong year,
reporting operating profits up 23%, whilst Westcon underperformed as a result of several factors.
“We remain confident in the sustainability of our long-term growth strategy and have maintained our capital
distribution at the same level as the previous year. The secular trends in our industry remain favourable.
“Logicalis is expected to continue its growth trajectory. Westcon is now on a much stronger footing
following the management changes and we are encouraged by its trading in the new financial year.”
PROFILE AND GROUP STRUCTURE
Datatec is a global ICT solutions and services group with more than 7,500 employees worldwide and with operations
in over 50 countries.
The Group’s main lines of business comprise
• Technology - Westcon: distribution of networking, security and unified
communications products
• Integration - Logicalis: ICT infrastructure solutions and services
• Consulting - Analysys Mason, Intact and The Via Group: strategic and technical consulting
OVERVIEW
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 complementary acquisitions. The secular trends in our industry remain favourable.
Despite the challenging trading environment, Datatec has maintained its strong market position with no particular
dependency on any single market, territory or technology sector and has continued to improve its customer mix.
The Group maintained top line growth despite the trading background and operational difficulties faced by its
largest division, Westcon, with revenues increasing by 8% to $5,69 billion (2013: $5,25 billion).
Overall Group gross margins were 14,8% (2013: 14,9%). EBITDA was $175,3 million (2013: $185,5 million) while
underlying* earnings per share are 35,7 US cents (2013: 43,1 US cents).
The resilience of the business and cash generating ability has enabled the Group to maintain its full year capital
distribution (effective dividend) of 17 US cents.
Westcon’s performance was impacted adversely by the ERP system roll out in North America which had a big effect on
transaction volumes and by one-off asset write-offs.
On 15 January 2014 the Group’s Interim Management Statement announced that a provision of up to $20,0 million might
be required against the recoverability of certain assets in Westcon North America. The majority of these legacy
vendor claims were subsequently collected and a $6,2 million write-off of the remaining balance is reflected in
these accounts. Management is in the process of completing an internal review in this subsidiary. No further impact
on the Group’s accounts has come to light to date and this review will be completed prior to the release of audited
financial statements for the financial year ended 28 February 2014.
Logicalis performed very well, in line with management’s expectations, and benefitted from the acquisition of the
European operations of 2e2 in March 2013.
Latin America continues to be the Group’s strongest growing region but the weakness of emerging market currencies
in the year impacted performance in US dollar terms. Moderate economic recovery in Europe is reflected in the
increased revenue and gross profit contributed by that region. The operational difficulties of Westcon in North
America have reduced the proportion of the Group’s business in that market.
The rest of the world outside North America and Europe has continued to make a larger contribution to the Group’s
overall financial performance and now generates 39% (2013: 36%) of Datatec’s revenues and 44% (2013: 43%) of gross
profits.
In addition to supporting Logicalis’ continued strong growth, the Group’s near-term focus is on restoring Westcon
to operational efficiency and a profit growth trajectory. The mid-term priority remains focussed on building scale
and critical mass in the developing markets that the Group has moved into successfully in the past few years.
During FY14 the Group completed a number of transactions:
• 4 March 2013 - Logicalis acquired four European operations of 2e2 for $31 million.
• 31 May 2013 - Westcon completed the acquisition of Comztek Holdings (Pty) Ltd for $9 million.
• 31 August 2013 - Westcon sold its 54% holding in Inflow Technologies.
• 14 October 2013 - Logicalis acquired iConsult in Jersey.
Datatec believes that the prevailing economic climate continues to provide attractive opportunities to enhance
margins, to facilitate consolidation in proven markets and to extend the Group’s geographical reach by continuing
to make selective acquisitions.
FINANCIAL RESULTS
Group revenues increased by 8% to $5,69 billion (2013: $5,25 billion) with the rest of the world outside North
America and Europe continuing to make a larger percentage contribution - see below.
72% of Group revenue came from Westcon; 27% from Logicalis and 1% from Consulting Services.
Revenue % contribution by geography
FY2014 FY2013
North America 27% 32%
Latin America 18% 16%
Europe 34% 32%
Asia Pacific 11% 12%
Africa & Middle East (AME) 10% 8%
100% 100%
Gross margins were 14,8% (2013: 14,9%) and gross profit increased by 8% to $841,4 million (2013: $780,3 million).
Gross profit % contribution by geography
FY2014 FY2013
North America 23% 28%
Latin America 25% 24%
Europe 33% 29%
Asia Pacific 11% 12%
Africa & Middle East (AME) 8% 7%
100% 100%
Operating costs grew at 12% to $666,1 million (2013: $594,8 million).
EBITDA was $175,3 million (2013: $185,5 million), including net unrealised foreign exchange losses of
$3,4 million (2013: $1,6 million). Depreciation was $32,7 million (2013: $28,6 million). Amortisation of
intangible fixed assets arising from acquisitions and software was $15,1 million (2013: $15,5 million).
The fair value of companies acquired during the year was $42,6 million. As a result, goodwill and intangible
assets increased by $12,9 million and $10,9 million respectively. The revenue and EBITDA included from these
acquisitions in 2014 was $224,0 million and $8,6 million respectively. Had the acquisition dates been 1 March 2013,
revenue attributable to these acquisitions would have been approximately $256,5 million. It is not practical to
establish the EBITDA that would have been contributed by the acquisitions in 2014 if they had been included for
the entire year.
Operating profit was $122,1 million (2013: $141,4 million). The net interest charge decreased slightly to
$21,6 million (2013: $21,9 million). Profit before tax was $101,8 million (2013: $127,2 million).
The Group’s reported effective tax rate increased to 36,8% from 33,1%. The normalised effective tax rate was 37,1%
(2013: 34,9%). The Group’s effective tax rate is higher than the South African statutory rate of 28%, primarily due
to profits arising in jurisdictions with higher statutory tax rates.
Headline earnings per share were 31,6 US cents (2013: 40,8 US cents). Underlying earnings per share were
35,7 US cents (2013: 43,1 US cents).
The Group ended the financial year with net debt of $86,7 million (2013: net cash $47,6 million), taking into account
long-term debt of $17,4 million and short-term debt of $27,6 million, included in payables and provisions. The year
on year movement is driven by Westcon’s return to organic growth and the timing of certain deals. The Group continues
to enjoy comfortable headroom in its working capital facilities.
The Group issued 4,7 million new shares during the year, with 1,5 million shares issued as part of acquisition
activities, 2,5 million shares were issued as part of an institutional placement, 0,1 million shares were issued to
satisfy exercised share options and 0,6 million shares were issued in settlement of exercises of awards under
Datatec’s long term incentive share based payment schemes.
The Group paid $31,6 million to shareholders during the year: a final capital distribution in respect of FY13 of
$16,2 million in July 2013 and an interim capital distribution in respect of FY14 of $15,4 million in November 2013. A
final distribution for the 2014 financial year has been declared as set out below.
Losses of $48,3 million (2013: $45,9 million) arising on translation to presentation currency are included in
comprehensive income of $24,9 million (2013: $50,4 million).
Westcon
Westcon accounted for 72% of the Group’s revenues (2013: 73%) and 50% of its EBITDA (2013: 59%).
Westcon revenue % geographic split
FY 2014 FY 2013
North America 29% 33%
Latin America 11% 10%
Europe 35% 34%
Asia Pacific 12% 13%
AME 13% 10%
100% 100%
Westcon revenue % by product category
FY 2014 FY 2013
Cisco 46% 49%
Convergence 11% 12%
Security 24% 24%
Other 19% 15%
100% 100%
Westcon is a value added distributor of category-leading unified communications, network infrastructure, data
centre and security solutions with a global network of specialty resellers. Westcon’s portfolio of market-leading
vendors includes: Cisco, Avaya, Brocade, Polycom, Check Point, Blue Coat and Palo Alto.
Revenues increased 6% to $4,1 billion (2013: $3,8 billion) including an $89,3 million contribution from acquisitions.
35% of Westcon’s revenue was generated in Europe (2013: 34%), 29% in North America (2013: 33%), 12% in Asia Pacific
(2013: 13%), 13% in AME (2013: 10%) and 11% in Latin America (2013: 10%). Cisco products make up 46% of Westcon’s
revenue (2013: 49%), 11% for convergence (Avaya/Nortel) (2013: 12%), 24% for security (2013: 24%) and 19% for other
vendors (2013: 15%).
Gross margins were 11,2% (2013: 11,6%) due to a combination of increased competitive pressures across all territories
and a reduction in early payment discounts for Cisco products in Europe. The gross margin was also impacted by the
$6,2 million provision relating to legacy vendor claims noted above.
Gross profit increased 2% to $453,4 million (2013: $442,8 million). Operating expenses increased 11% to $362,1 million
(2013: $325,5 million) including expenses of $6,1 million associated with on-going ERP implementation.
Westcon’s EBITDA was $91,3 million (2013: $117,3 million) while EBITDA margins were 2,3% (2013: 3,1%), with decreased
margins across all territories. Operating profit was $62,0 million (2013: $98,2 million) after a non-recurring $5,5
million write-off of the abortive development costs for an e-commerce platform.
Westcon’s net working capital days increased from 27 days in 2013 to 37 days in 2014 due to a combination of higher
DIO and lower DPO. Net debt increased by $171 million, resulting in a net debt position of $195 million at year end
as increased working capital requirements drove increased use of working capital facilities.
Effective 31 May 2013, Westcon completed the acquisition of Comztek Holdings (Pty) Ltd, a leading systems distributor
with coverage in 26 African countries. The integration of Comztek into the Westcon South Africa business, which Datatec
owns jointly with its BEE partner, Mineworkers Investment Company, is now in progress.
On 31 August 2013, Westcon sold its 54% holding in Inflow Technologies following Datatec’s decision to exit the
distribution market in India in May 2013.
Westcon appointed a new CEO in December 2013 and a new CFO in March 2014.
Westcon’s transitioning of its global ERP system to a new platform had commenced with North America in the previous
financial year. The roll-out was temporarily suspended during the financial year ended 28 February 2014 while
operational problems were addressed and rectified. In the current financial year the roll-out of the new ERP system
has recommenced in the Asia Pacific region.
Westcon has established a services division and to accelerate the development of this operation the Intact Group will
be transferred into Westcon from the Consulting Services division in June 2014.
Westcon management is focussed on improving operational efficiency and a return to profit growth.
Logicalis
Logicalis accounted for 27% of the Group’s revenues (2013: 26%) and 49% of its EBITDA (2013: 40%).
Logicalis revenue % geographic split
FY 2014 FY 2013
North America 25% 31%
Latin America 35% 36%
Europe 31% 24%
Asia Pacific 9% 9%
100% 100%
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.
Revenue increased by 15% to $1,55 billion (2013: $1,35 billion), including $134,3 million of revenue from the
acquisitions made during the year. Organic revenue increased by 5%.
Revenues were sequentially 2% higher in the second half of the financial year on higher professional services and
product revenues. Gross margin improved in the second half of the financial year and profits were also higher than
in the first half. All regions, with the exception of North America, had solid year on year revenue growth. North
America was adversely impacted by the decline in product revenues experienced by IBM, a major vendor partner. The
Latin America region continued to have strong growth although the reported results are reduced by the strengthening
of the US dollar against the Brazilian Real in particular. In Argentina there were also government imposed import
restrictions during the second half that had an adverse impact on the performance of the Latin America region.
Revenues from total services were up 31%, with both professional services and annuity service revenues significantly
up, and reflected the long-term strategic focus on growing services. Revenues from product sales were up 9%, with a
strong increase in Cisco product revenues partially offset by declines in the IBM and HP vendor categories.
Gross margin was also up at 23,3% (2013: 23,0%). Overall service margins were higher but product margins were down
slightly due to lower rebates (on lower IBM and HP product revenues). The gross profit was up 16% to $360,9 million
(2013: $310,3 million) and operating expenses increased by 17%. EBITDA increased 15% to $90,3 million
(2013: $78,6 million), resulting in an EBITDA margin of 5,8% (2013: 5,8%).
Operating profit was up 23% to $67,5 million (2013: $54,7 million) after charges for depreciation and amortisation
of intangible assets.
Logicalis continues to have a contingent liability in respect of a possible tax liability at its Promon-Logicalis
subsidiary in Brazil.
On 4 March 2013 Logicalis acquired four European operations of 2e2, namely the Spanish and Irish systems
integration businesses, the Channel Islands business (Jersey and Guernsey) and an operation in the Netherlands
which is a leading IT Service Management consulting organisation.
On 14 October 2013 Logicalis acquired iConsult (Jersey) Limited, a provider of desktop and mail-hosted solutions
to the small and medium businesses (SMB) market.
Trading conditions are stable although the outlook for the Latin America region has weakened over the last few
months. In Argentina the government-imposed import restrictions are continuing to disrupt normal business
activities.
Logicalis expects to continue investing in cloud and data centre services and is planning to deliver further
growth in revenues and profits in the 2015 financial year.
Consulting Services
The Consulting Services division accounted for 1% of Group revenues (2013: 1%) and 1% of EBITDA (2013: 1%).
The division comprises: Analysys Mason, a provider of management consulting, advisory, modelling and market
intelligence services to the telecoms, IT and digital media industries; and The Via Group (‘Via’), a specialist
professional services organisation providing unified communications and integrated voice solutions that encompass
Microsoft technology. Intact, a services and support consultancy delivering high-end professional services in
networking, unified communications, and related security, wireless and data centre connectivity focussing on
Cisco technologies, will be transferred to Westcon in June 2014.
Revenues were $72,6 million (2013: $74,0 million). A strong performance from Analysys Mason’s Consulting and Research
units was offset by a contraction of revenues at Intact and Via. Despite the lower revenues, the continued improved
utilisation of consultants and internal restructuring at Intact helped to improve gross margins from 36,8% to 37,3%.
EBITDA was $2,1 million (2013: $3,2 million).
Corporate
Corporate encompasses the net operating costs of the Datatec head office entities of $13,2 million (2013: $14,3
million) and unrealised and realised foreign exchange gains of $2,6 million and $2,1 million respectively
(2013: $0,5 million and $0,2 million respectively).
Accounting for acquisitions
The following table sets out the assessment of the fair value of assets acquired across all acquisitions made
by the Group, 2e2 is the largest component of this.
Acquisitions made in FY14
Assets acquired $’000
Non-current assets 7 299
Current assets 89 848
Non-current liabilities (12 855)
Current liabilities (64 790)
Net asset value acquired 19 502
Intangible assets 10 925
Goodwill 12 882
Non-controlling interest (676)
Fair value of acquisitions 42 633
Purchase consideration
Issue of Datatec shares 3 925
Cash 38 708
Total consideration 42 633
Cash outflows for acquisitions
Cash and cash equivalents acquired 22 164
Cash consideration paid (38 708)
Net cash outflow for acquisitions (16 544)
CURRENT TRADING AND OUTLOOK
Economic conditions remain very mixed across Datatec’s markets. While improvement has been evident in Europe there
are adverse indications in Australia and North America is variable. Customers remain cautious about investment and
are increasingly seeking service based models of IT resource delivery.
The Group aims to operate in the sectors which are growing as a result of this trend, such as infrastructure as a
service, data centre and networking managed services, the integration of unified communications systems and security
solutions.
Based on current trading conditions and prevailing exchange rates, the Board expects revenues for the 2015
financial year to be above $6,0 billion. The Board expects underlying* earnings per share to be more than 40 US cents.
The financial information on which this forecast is based has not been reviewed and reported on by Datatec’s
external auditors.
CASH DISTRIBUTION BY WAY OF CAPITAL REDUCTION
The Board has elected to maintain its final capital distribution for the year due to its strong financial
position and prospects.
The Group paid an interim capital distribution in respect of FY14 to shareholders of 80 RSA cents (approximately
8 US cents, 2013: 8 US cents) per share on 2 December 2013. The Group has declared and will distribute to
shareholders a final capital reduction in lieu of a dividend out of Contributed Tax Capital of 93 RSA cents
(approximately 9 US cents, 2013: 9 US cents) per share, making a total capital distribution to shareholders for
the financial year ended 28 February 2014 of 173 RSA cents (approximately 17 US cents, 2013: 17 US cents)
per share.
The salient dates will be as follows:
Last day to trade Friday, 11 July 2014
Shares to commence trading “ex” the distribution Monday, 14 July 2014
Record date Friday, 18 July 2014
Payment date Monday, 21 July 2014
The final capital distribution will be paid to shareholders on the Jersey branch register in GBP translated at the
closing exchange rate on Wednesday, 16 July 2014.
Share certificates may not be dematerialised or rematerialised between Monday, 14 July 2014 and Friday, 18 July 2014,
both days inclusive.
DIRECTORATE
As announced on 15 January 2014, Rob Evans will become Group Operations Director with effect from 1 June 2014 and
Jurgens Myburgh, who was appointed as a Director of the Board of Datatec on 1 May 2014, will become Chief Financial
Officer.
REPORTING
The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE Limited
Listings Requirements for provisional reports and the requirements of the Companies Act of South Africa. The Listings
Requirements require provisional reports to be prepared in accordance with the framework concepts and the measurement
and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting
Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting.
The accounting policies applied in the preparation of the condensed consolidated financial statements are consistent
with those applied in the prior year, other than for the adoption of IFRS 7 (Revised) Financial Instruments: Disclosures,
IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities,
IFRS 13 Fair Value Measurement, IAS 19 (Revised) Employee Benefits, IAS 27 (Revised) Separate Financial Statements,
IAS 28 (Revised) Investments in Associates and Joint Ventures and various other improvements. The adoption of these
accounting standards did not have a material impact on the Group results. There were no material subsequent events.
The preparation of the condensed consolidated financial statements for the financial year ended 28 February 2014 was
supervised by the Chief Financial Officer, Rob Evans.
These condensed consolidated financial statements for the year ended 28 February 2014 have been reviewed by
Deloitte & Touche, who expressed an unmodified review conclusion. A copy of the auditor’s review report is available
for inspection at Datatec’s registered office.
On behalf of the Board
SJ Davidson JP Montanana RP Evans
Chairman Chief Executive Officer Chief Financial Officer
14 May 2014
* 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
Condensed consolidated statement of comprehensive income
for the year ended 28 February 2014
Year ended Year ended
February 2014 February 2013
US$’000 US$’000
Revenue 5 688 054 5 246 667
Existing operations 5 464 474 5 063 855
Acquisitions 223 580 182 812
Cost of sales (4 846 618) (4 466 333)
Gross profit 841 436 780 334
Operating costs (662 728) (593 151)
Unrealised foreign exchange losses (3 443) (1 645)
Operating profit before finance costs, depreciation and amortisation (“EBITDA”) 175 265 185 538
Depreciation (32 669) (28 657)
Amortisation of acquired intangible assets and software (15 066) (15 508)
Impairment of intangible assets (5 473) -
Operating profit 122 057 141 373
Interest income 3 580 5 086
Financing costs (25 168) (26 993)
Acquisition-related fair value adjustments 2 400 6 443
Fair value movements on put option liabilities 2 421 (505)
Fair value movements on deferred purchase consideration (21) 6 948
Share of equity-accounted investment earnings 441 1 078
Other income 264 260
Loss on disposal of investments (1 778) -
Profit before taxation 101 796 127 247
Taxation (37 496) (42 163)
Profit for the year 64 300 85 084
Other comprehensive income
Items that may be reclassified subsequently to profit and loss
Exchange differences arising on translation to presentation currency (48 271) (45 925)
Other items (566) -
Translation difference on equity loans 12 700 13 646
Tax effect of equity loans translation (3 301) (2 386)
Total comprehensive income for the year 24 862 50 419
Profit for the year attributable to:
Owners of the parent 55 780 78 077
Non-controlling interests 8 520 7 007
64 300 85 084
Total comprehensive income attributable to:
Owners of the parent 22 882 48 555
Non-controlling interests 1 980 1 864
24 862 50 419
Number of shares issued (millions)
Issued 197 193
Weighted average 197 191
Diluted weighted average 198 193
Earnings per share ("EPS") (US cents)
Basic EPS 28,4 40,8
Diluted basic EPS 28,2 40,4
SALIENT FINANCIAL FEATURES
Headline earnings 62 083 78 071
Headline earnings per share (US cents)
Headline 31,6 40,8
Diluted headline 31,3 40,4
Underlying earnings 70 165 82 424
Underlying earnings per share (US cents)
Underlying 35,7 43,1
Diluted underlying 35,4 42,6
Net asset value per share (US cents) 442,1 448,2
KEY RATIOS
Gross margin (%) 14,8 14,9
EBITDA (%) 3,1 3,5
Effective tax rate (%) 36,8 33,1
Normalised effective tax rate (%) 37,1 34,9
Exchange rates
Average Rand/US$ exchange rate 10,1 8,4
Closing Rand/US$ exchange rate 10,7 8,8
Condensed consolidated statement of financial position
as at 28 February 2014
Year ended Year ended
February 2014 February 2013
US$’000 US$’000
ASSETS
Non-current assets 673 650 661 324
Property, plant and equipment 65 282 62 476
Capitalised development expenditure 45 099 49 599
Goodwill 438 198 426 622
Acquired intangible assets and software 53 664 50 684
Investments 7 054 6 613
Deferred tax assets 53 909 49 961
Other receivables and prepayments 10 444 15 369
Current assets 2 318 374 2 028 740
Inventories 432 594 362 172
Current tax asset 14 197 18 586
Trade and other receivables 1 492 915 1 334 136
Cash and cash equivalents 378 668 313 846
Total assets 2 992 024 2 690 064
EQUITY AND LIABILITIES
Ordinary shareholders' funds 871 617 865 433
Non-controlling interest 52 868 51 578
Total equity 924 485 917 011
Non-current liabilities 94 131 84 324
Long-term liabilities 17 359 10 419
Amounts owing to vendors 2 447 3 050
Liability for share-based payments 7 501 12 317
Deferred tax liabilities 66 052 57 147
Other liabilities 772 1 391
Current liabilities 1 973 408 1 688 729
Payables and provisions 1 531 265 1 417 181
Amounts owing to vendors 7 497 9 649
Current tax liabilities 14 208 21 369
Bank overdrafts 420 438 240 530
Total equity and liabilities 2 992 024 2 690 064
Capital expenditure incurred in the current year
(including capitalised development expenditure) 43 528 45 523
Capital commitments at the end of the year 20 422 13 283
Lease commitments at the end of the year 129 966 99 275
Payable within one year 32 319 31 095
Payable after one year 97 647 68 180
Condensed consolidated statement of cash flows
for the year ended 28 February 2014
Year ended Year ended
February 2014 February 2013
US$’000 US$’000
Operating profit before working capital changes 183 437 192 064
Working capital changes (151 210) 124 702
(Increase)/decrease in inventories (82 917) 45 321
Increase in receivables (150 710) (125 387)
Increase in payables 82 417 204 768
Cash generated from operations 32 227 316 766
Net finance costs paid (21 588) (21 907)
Taxation paid (45 073) (53 195)
Cash (outflows)/inflows from operating activities (34 434) 241 664
Cash outflows for acquisitions (16 544) (74 509)
Net cash outflows from other investing activities (42 583) (44 896)
Capital distributions (31 594) (32 394)
Net cash inflows/(outflows) from other financing activities 15 236 (13 664)
Net (decrease)/increase in cash and cash equivalents (109 919) 76 201
Cash and cash equivalents at the beginning of the year 73 316 1 813
Translation differences on opening cash position (5 167) (4 698)
Cash and cash equivalents at the end of the year (*) (41 770) 73 316
(*) Comprises cash resources, net of bank overdrafts and trade finance advances.
Condensed consolidated statement of changes in total equity
for the year ended 28 February 2014
Year ended Year ended
February 2014 February 2013
US$’000 US$’000
Balance at the beginning of the year 917 011 879 428
Total comprehensive income 24 862 50 419
New share issues 22 546 29 508
Capital distributions (31 594) (32 394)
Equity-settled deferred purchase consideration (3 333) (3 333)
Share-based payments (109) (6 227)
Derecognition of put option liability 131 5 102
Recognition of put option liability (1 864) -
Other (201) -
Acquisitions (2 009) 853
Disposals (265) -
Non-controlling interest (690) (6 345)
Balance at the end of the year 924 485 917 011
Determination of headline and underlying earnings
for the year ended 28 February 2014
Year ended Year ended
February 2014 February 2013
US$’000 US$’000
Profit attributable to the equity holders of the parent 55 780 78 077
Headline earnings adjustments 6 303 (6)
Intangible impairment 5 473 -
Profit on disposal of property, plant and equipment and investments 1 844 (13)
Tax effect (1 013) 8
Non-controlling interest (1) (1)
Headline earnings 62 083 78 071
DETERMINATION OF UNDERLYING EARNINGS
Underlying earnings adjustments 14 411 10 710
Unrealised foreign exchange losses 3 443 1 645
Acquisition-related fair value adjustments (2 400) (6 443)
Amortisation of acquired intangible assets 13 368 15 508
Tax effect (6 406) (6 460)
Non-controlling interest 77 103
Underlying earnings 70 165 82 424
Segmental analysis
for the year ended 28 February 2014 Year ended Year ended
February 2014 February 2013
US$’000 US$’000
Revenue
Westcon 4 065 112 3 822 193
Logicalis 1 550 322 1 350 442
Consulting Services 72 620 74 032
Revenue 5 688 054 5 246 667
EBITDA
Westcon 91 301 117 320
Logicalis 90 318 78 593
Consulting Services 2 094 3 174
Corporate (8 448) (13 549)
EBITDA 175 265 185 538
Operating profit
Westcon 61 974 98 200
Logicalis 67 523 54 697
Consulting Services 1 041 2 081
Corporate (8 481) (13 605)
Operating profit 122 057 141 373
Total assets
Westcon 2 036 245 1 864 079
Logicalis 886 131 769 075
Consulting Services 53 258 48 813
Corporate 16 390 8 097
Total assets 2 992 024 2 690 064
Total liabilities
Westcon (1 443 233) (1 240 133)
Logicalis (585 037) (497 151)
Consulting Services (22 167) (18 692)
Corporate (17 102) (17 077)
Total liabilities (2 067 539) (1 773 053)
Enquiries
Jens Montanana - Chief Executive Officer +44 (0) 1753 797 118
Rob Evans - Chief Financial Officer +44 (0) 20 7395 9012
Wilna de Villiers - Group Marketing Manager +27 (0) 11 233 1013
Jefferies International Limited - Nominated Advisor and Broker
Nick Adams Alex Collins +44 (0) 20 7029 8000
finnCap - Broker
Tom Jenkins Henrik Persson +44 (0) 20 7220 0500
Instinctif Partners
Adrian Duffield (UK) +44 (0) 20 7457 2020
Frederic Cornet (SA) +27 (0) 11 447 3030
Datatec Limited (www.datatec-group.com)
Sandton
14 May 2014
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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