Higher IT demand boosts Datatec, which may sell its consulting business

accreditation
Datatec announced on Tuesday that it had entered into negotiations that may result in the sale of Analysys Mason.
Datatec announced on Tuesday that it had entered into negotiations that may result in the sale of Analysys Mason.
Getty Images
  • Datatec has reported a 13% increase in revenue,  to $4.6 billion.
  • Chip shortages led to higher unprocessed sales orders in Logicalis and Westcon divisions.
  • Datatec has entered into negotiations regarding a potential sale of its consulting business Analysys Mason.


ICT solutions provider Datatec posted $82.1 million (R1.2 billion) in operating profit in the year to the end of February, up 64% from the previous reporting period, as the group benefited from a rising demand for networking and security services. 

Group revenue hit $4.6 billion, up 13%. The company declared a final dividend of R1.11 per share.

Datatec operates three divisions: Logicalis, a UK-based ICT infrastructure and service provider; a US-based technology provider and specialist distributor Westcon International and management consulting group Analysys Mason.

Datatec announced on Tuesday that it had entered into negotiations that may result in the sale of Analysys Mason. The move is aimed at unlocking value.

In the past year, Logicalis was the largest contributor to the group in terms of profitability, followed by Westcon.

CEO Jens Montanana said the company benefited from the technology demand for networking, security and cloud infrastructure, with an increased software and services mix driving higher recurring income.

"Whilst 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 said.

Supply chain issues and global semiconductor shortages created extended lead times on certain hardware product deliveries during the year. The backlogs affected revenue and resulted in significantly higher sales orders waiting to be fulfilled in Logicalis and Westcon.

Although the situation was expected to improve, further supply chain disruptions resulting from Covid-19-related lockdowns in China, the Russian invasion of Ukraine and spiralling energy costs are said to have had an adverse impact on the current financial year.

Datatec's share price was down 2.5% at Tuesday lunchtime. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
15.80
+1.1%
Rand - Pound
19.39
-0.0%
Rand - Euro
16.68
-0.0%
Rand - Aus dollar
10.98
-0.1%
Rand - Yen
0.12
-0.0%
Gold
1,827.37
0.0%
Silver
21.15
0.0%
Palladium
1,880.50
0.0%
Platinum
911.50
0.0%
Brent Crude
113.12
+2.7%
Top 40
59,993
+1.6%
All Share
66,349
+1.6%
Resource 10
64,422
-0.2%
Industrial 25
76,590
+2.6%
Financial 15
15,623
+1.9%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot