Datatec despairs of UK economy


Datatec despairs of UK economy

Alex Scroxton

Datatec, the South Africa-based group behind Westcon and Logicalis, has reported a solid end to its fiscal 2012 which closed on 29 February, but once again has bemoaned a challenging economic environment in the UK, revealing that the bulk of its growth is now coming from emerging markets.

Chief exec Jens Montanana talked up a strong performance in South America - notably Brazil - and APAC, as sales spiked 17% on 2011 to $5.03bn (£3.15bn) and EBITDA grew 34% yo $190.2m.

"Our global reach and diversity continues to serve us well, helping to insulate the Group against the challenging trading conditions in North America and Europe," said Montanana. "Europe looks likely to remin challenging."

Geographies outside its European and American cores now contribute 33% of Group revenues and 40% of gross profits, which Datatec said validated its decision to diversify outside its comfort zone.

Broken out into its three business units, networking and security distribution powerhouse Westcon enjoyed pay-offs from recent investments in higher margin network security goods, as well as the effect of a number of acquisitions, booking sales of $3.7bn, up 17% year-on-year.

Meanwhile growth in annuity sales meant Logicalis turned in tasty figures as well, up 18% to $1.23bn. It also saw robust increases in hardware sales, with Cisco and HP kit doing particularly well.

Consulting Services also continued to improve, with sales up 10% to $79.4m.

In its earnings statement today, Datatec said it was now looking for sales of between $5.5bn and $5.8bn during the next 12 months, although as far as Europe and the UK are concerned, it is taking nothing for granted.

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