MERGERS, ACQUISITIONS AND FINANCIAL RESULTS
Datatec issues trading updates in South Africa
Datatec, the international ICT group, is today publishing a year-end trading update for the financial year ended 28 February 2009.
The financial performance of the group remains in line with the expectations set out in the trading statement and IMS on 15 January 2009. Accordingly, the board expects earnings per share and headline earnings per share to be between 25 and 29 US cents per share, with underlying earnings per share expected to be between 31 and 35 US cents per share.
The board plans on paying the same level of annual capital distribution, at 12 US cents per share for the financial year ended 28 February 2009. Further details on the distribution will be included in the results announcement.
The group has focused on improving its cash generation, and therefore, the board is particularly pleased that operating cash generation in the second half of the financial year has been very strong within Westcon, well ahead of the group's expectations. At the end of the financial year, Datatec moved to an overall net cash position from a previous net debt position.
As indicated in the trading statement and IMS in January, product revenue has recently been following trends seen in many of the world's major economies, and has been tracking between 10% and 15% lower than for the same period last year. However, services and consulting revenue has been less impacted by the current economic climate and some areas, such as annuity services revenue, have improved year-on-year.
Separately, it is announced that Dean Douglas will become President and Chief Executive of Westcon Group on 1 April 2009. Dean joined Westcon Group as Chief Operating Officer in June 2008, and has held senior executive roles at Motorola and IBM, as well as being Chief Executive of LCC International.
Jens Montanana, Chief Executive Officer, said: “The group completed the year with improved working capital and a net cash position, following strong cash generation in the second half, illustrating both the defensive nature of our business model and the positive actions taken. We plan to pay the same level of capital distribution for the year just completed, reflecting confidence in our financial position, particularly when some parts of the group are performing with relative resilience in the downturn.”