Datatec to return to profitability after subsidiaries step up

By Sandile Mchunu Time of article published May 9, 2019

Share this article:

DURBAN – Listed information and communications technology (ICT) group Datatec is set to return to profitability in the year to end February on the back of improved performance from its subsidiaries.

The group said in a trading guidance to shareholders on Tuesday that it expected that the improved performance would bump its underlying earnings per share to 6.6 US cents a share, an improvement of 12.2 US cents compared to last year's underlying loss per share of 5.6 cents.

It said that headline earnings per share (Heps) were also forecast to rise to 0.7 US cents, 19.8 US cents higher than the 19.1 US cents headline loss a share reported last year.

“The year-over-year increase in underlying earnings per share and headline earnings per share is primarily as a result of the very good progress made in reshaping Westcon International combined with continuing improved performance in Logicalis and Analysys Mason,” said Datatec.

The improved outlook comes after Datatec sold Westcon Latin Americas for $800 million (R11.56 billion) and 10percent of Westcon International for $30m to Synnex Corporation in 2017.

The group said the reshaping and the restructuring of the businesses resulted in improved results for the six months to end August by turning around a loss $29.4m into a profit of $6.6m compared to a year before.

It said it expected its earnings per share (Eps) to decline by 73 percent to 5.5 US cents compared to last year’s 20.5 US cents reported in FY18 as a result of the profit generated on the sale of the Westcon Americas and the sale of Logicalis SMC.

Datatec sold the non-core Logicalis SMC to DXC Technology Company in the Netherlands for $42m in 2017.

But the group added that earnings per share from continuing operations would increase to 0.6 US cents, 53.9 US cents higher than the 53.3 US cents loss a share from continuing operations reported last year.

Datatec declined by 3.5 percent on the JSE on Tuesday to close at 32.61.

Share this article:

Related Articles