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Datatec shared decent FY numbers at Westcon-Comstor and Logicalis

Channel businesses tap into growing demand for security, networking and hybrid infrastructure

Financial results from the channel tend to have graphs that go in the upwards direction, and numbers from Westcon-Comstor and Logicalis on their latest fiscal year have added to that trend.

The distributor and system integrator’s parent firm Datatec has shared details of its financial performance for the year ended 28 February, with the channel player having performed well.

Total net revenue was up by 11.8% to $2.89bn, with demand holding up and Westcon-Comstor able to enjoy decent market share across the key areas of security, networking and hybrid infrastructure.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) profit increased by 52% to $68.1m, with gross margins averaging 11% globally. Westcon International’s gross profit increased by 9.6% to $319m, with APAC and Europe driving sales.

It is difficult to make comparisons against past years affected by the pandemic but David Grant, CEO of Westcon-Comstor, said that the determination the business had shown to get through that period was still supporting its performance.

“Two years ago, our company demonstrated strong resilience in the face of the pandemic, and the FY22 results we announced today illustrate our ability to not just sustain strong momentum, but to go beyond and adapt and win in a rapidly changing market,” he said.

“Our focus on portfolio expansion with software and subscription-based solutions has helped us to not only record double-digit, organic revenue growth – despite material product supply constraints – but to drive unprecedented EBITDA improvement as well. It’s a true testament to the hard work of our teams across all operations, who have performed exceptionally well this past year,” he added.

Datatec also owns Logicalis, which is the largest contributor to the group in terms of profitability, and that business produced a 14.2% increase in revenues to $1 656.0m. EBITDA increased by 12.9% to $92.5m.

There was a sense that if component shortages had not been hampering the market, and the war in Ukraine had not sparked more economic uncertainty, then things would have been even better for Logicalis.

Jens Montanana, chief executive of Datatec, said that it had seen a positive performance across all divisions during the fiscal year, “despite global semiconductor shortages and ongoing supply chain constraints which have resulted in a growing backlog”.

“We have continued to benefit from the successful positioning of our businesses to take full advantage of technology demand for networking, security and cloud infrastructure with an increased software and services mix driving higher recurring income,” he added.

“While we see continued demand for our products and services across the world, and have positioned our operations to take full advantage of this, the supply chain headwinds compounded by various factors – including the war in Ukraine, lockdowns in China and global inflationary pressures – will impact our performance in FY23,” he warned.

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