Johannesburg - Datatec says its revenue has gained 18.2% in the four months to June when compared to last year as its largest unit, Westcon, continued to grow sales.
Westcon, which battled somewhat a few years ago as the installation of a new enterprise resource planning system that took its toll on the company’s ability to manage operations, reported what dual-listed Datatec refers to as “excellent revenue growth”.
This it says, was especially true in North America.
Its consulting unit, Logicalis, also delivered revenue growth when compared to the year-ago period in what Datatec says was a “challenging market”.
CEO Jens Montanana, says Westcon is contributing strongly to full-year growth and continues to make progress in improving operating efficiency although the division was impacted by foreign exchange losses.
He adds: “Logicalis continues to adjust to changing market conditions and is addressing business structures to improve its market positioning and operating efficiency.”
However, the group noted its gross margins were lower across both those units, especially in developed markets, where product sales have increased on the back of a number of large volume deals.
Growth in emerging markets was affected by the sustained strength of the US dollar.
Despite the price pressure, its operating margin would have gained ground thanks to improved revenue and its cost-containment moves, although restructuring costs - to be disclosed at a later date - and foreign exchange losses offset the gains.
Cost reductions are a trend across the ICT industry as they face increasing price pressure and the sector consolidates.
Datatec stock was trading 0.56% lower in Johannesburg at mid-morning, at R66.03.
IOL