Datatec issues new profit warning, Westcon still soft

ICT solutions provider Datatec has issued a profit warning after trading at Westcon failed to improve

Datatec, the South Africa-based parent of Logicalis and Westcon, has warned the financial markets that it expects its full-year profits to be lower than previously forecast due to ongoing trading problems at Westcon.

In an interim management statement covering the period from 1 September to 31 December 2014, and trading statement for the financial year ending 28 February 2014, Datatec said that full-year revenues were still expected to come in at around $5.7bn (£3.5bn), post-tax profits would be down by up to $13m and EPS by up to seven cents. It had previously forecast profit after tax to come in at around $102m.

Datatec said the impact of a recent ERP transition in North America continued to impact Westcon’s high volume transaction business, while foreign currency weakness against the US dollar meant trading was softer in a number of key markets, although it did not specify which ones.

Trading over at Logicalis remained robust in an environment that, nevertheless, still presented the integrator with some challenges, and Analysys Mason was the strongest performer in its Consulting Services division once again.

Datatec chief exec Jens Montanana said he remained confident that the issues are being addressed, adding: “Our recent moves to strengthen Westcon’s leadership team should quickly improve operating execution [and] the business remains well positioned to continue to trade successfully and regain momentum.”

Separately, Datatec has also announced the appointment of a new CFO following the appointment of the current incumbent, Rob Evans, to the post of group operations director.

Johannesburg-based Jurgens Myburgh will join the firm from the Standard Bank of South Africa, where he was previously head of mergers and acquisitions. Initially trained at KPMG, Myburgh has extensive experience in finance, management, listed company corporate actions, and M&A.

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