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Second half looks rosy for Datatec

Microscope contributor

Datatec, the South African IT stalwart and owner of Westcon and Logicalis, is anticipating a return to growth in the second half of its fiscal year, after publishing an interim management statement for the three months to 31 December 2009.

The group said it had now returned to revenue growth in all its divisions, after weak demand impacted the business last year.

Networking distie Westcon and system integrator Logicalis were both singled out for praise.

Westcon saw third quarter revenues up sequentially, and improved profitability,and is understood to be reaping the benefits of some drastic cost-cutting measures early on in the recession. Its European business remained stable, while highest growth was seen in the emerging MEA and Indian sectors.

Meanwhile, trading at Logicalis improved over the first half of the year, said Datatec in a statement, although the unit continues to be affected by project delays. Its UK arm was seen performing particularly well in the closing weeks of 2009, thanks largely to the IBM year end.

“We are very pleased to see that all parts of the Group are now showing revenue growth, with Logicalis appearing to pass its inflection point at the end of 2009,” said CEO Jens Montanana.

“The inherent leverage in our business model is beginning to show through as the cost reductions initiated over a year ago provide a solid basis for capturing the benefits of any revenue growth,” he added.

Datatec stood by its previous full-year forecast sales of between $3.7bn and $4bn (£2.3bn).

The group’s financial year draws to a close at the end of February, and preliminary full-year 2010 results are due in May.


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