DATATEC LIMITED - Interim management statement
15 January 2015 9:00
DTC 201501150008A
Interim management statement

(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
(“Datatec” or “the Company”)


Datatec, ("Datatec" or the "Group", JSE and LSE: DTC), the
international Information and Communications Technology (ICT)
group, is today publishing an Interim Management Statement
covering the period from 1 September to 31 December 2014 ("the


The Group has continued its improved performance during the
Period. It seems clear that an economic recovery is
underway in the USA but elsewhere in Europe and Emerging
Markets economic conditions remain mixed and capital and
currency market volatility has increased.

Westcon   has   continued   with  its   strong   recovery,
particularly in North America, with significant year-on-
year growth in revenues. The global ERP transition is now
progressing well with the new implementations in Singapore
and Australia largely completed.

Logicalis is, as anticipated, experiencing an increase in
revenues relative to the first half of the current
financial year.

Datatec has increased its shareholding in Logicalis’ Latin
American subsidiary Promon-Logicalis Latin America Limited
(“PLLAL”) from 60% to 65%.

Jens Montanana, Chief Executive Officer said:

"The last few months have been strong across all divisions
with North and South America in particular delivering
robust performances.

“The Westcon turnaround of the first half has continued up
to December and its ERP roll-out is now well on track.

“Logicalis’ trading has improved in the second half as

On the release of its interim results on 15 October 2014,
the Group reiterated its forecast for the financial year
ending 28 February 2015 (“FY15”), being revenues above $6
billion and underlying* earnings per share of more than 40
US cents. Based on current trading, prospects and market
conditions, the Board expects the Group to achieve the
forecast result for the 2015 financial year. This forecast
is based on the following assumptions: revenue growth will
be largely driven by an improved performance at Westcon;
Westcon’s revenues will constitute approximately 75% of the
total revenue mix and Logicalis’ revenues 24%; a small
improvement in operating margins at Westcon and Logicalis;
an effective Group tax rate of approximately 36%. The
financial information on which this statement is based has
not been reviewed and reported on by Datatec's external


In the ten months to 31 December 2014 Westcon increased
revenue by over 20% compared to the ten months to 31
December 2013 (the “Comparative Period”) with growth in all
regions. In North America, revenues were over 40% higher
than in the Comparative Period.

A slight reduction in gross margins, driven by competitive
increases in market share, was offset by cost efficiencies
resulting in improved operating margins.


Logicalis’ revenue for the ten months to 31 December 2014
is now in line with the Comparative Period, which is an
improvement to the position at half year. Gross margins
have continued to improve due to favourable product mix and
an increase in the contribution from annuity services

Logicalis increased its shareholding in PLLAL from 60% to
65% by electing to take its share of a PLLAL dividend in
the form of scrip (plus the acquisition of a small number
of PLLAL shares from Promon in exchange for the issue of
Datatec shares). In the six months to 31 August 2014, PLLAL
contributed more than half of Logicalis’ EBITDA (before
central costs). The business has a very good market share
position, strong margins, an accomplished management team
and excellent prospects.

Consulting Services

Trading in the Consulting Services division has improved in
comparison with the first half year. Revenues are down
slightly on the Comparative Period and are impacted by the
weaker Pound Sterling in which a majority of the billing is

FY15 results

The Group expects to release its results for the year
ending 28 February 2015 on Wednesday 13 May 2015.

* Excluding impairment of goodwill and intangible assets,
profit or loss on sale of investments and assets,
amortisation of acquired intangible assets, unrealised
foreign exchange movements, acquisition related
adjustments, fair value movements on acquisition-related
financial instruments and the taxation effect on all of the



Datatec Limited (
                                             +44 (0) 1753        797
Jens Montanana, Chief Executive Officer
                                             +27 (0) 11          233
Jurgens Myburgh, Chief Financial Officer
                                             +27 (0) 11          233
Wilna de Villiers, Group Marketing Manager

Jefferies Hoare Govett – Nominated Advisor
and Broker
                                             +44 (0)      20     7029
Nick Adams/ Alex Collins

finnCap – Broker
                                             +44 (0)      20     7220
Tom Jenkins / Henrik Persson

Instinctif Partners
                                             +44 (0)      20     7457
Adrian Duffield (UK)
                                             +27 (0)       11    447
Frederic Cornet (SA)

15 January 2015

RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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