Logicalis joins $1bn club

IT group Datatec has heaped praise on integrator arm Logicalis after it smashed the $1bn annual revenue mark and generated almost half of the group's profits.

Boosted by a recent acquisition in Latin America and strong services sales, Logicalis grew revenues 19 per cent to $1.01bn (£667m) for the year to 28 February, according to Datatec’s audited 2009 results.

1,500-strong Logicalis has its headquarters in the UK, with offices in Germany, the US and South America. The Cisco Gold partner focuses on data centre solutions, unified communications and managed services.

Despite generating just 24 per cent of group sales, Logicalis contributed 43 per cent of the $126m Datatec banked in earnings before interest, tax, depreciation and amortisation (EBITDA). Its product sales increased by a fifth thanks mainly to strength in its Cisco business. HP sales were flat, while IBM product revenues decreased.

South Africa-based Datatec grew total revenue from $4bn to $4.2bn between 2008 and 2009 as its other main arm - distributor Westcon – suffered a slight decline in sales.

Westcon’s turnover stood at $2.9bn, down three per cent on the previous year’s tally as decreases in the US and Europe were offset by increases in Asia Pacific and Brazil. The networking specialist’s EBITDA fell from $102m to $68m.

Cisco products still account for more than half of Westcon revenues, with Nortel and Avaya contributing around a quarter of sales between them. Security made up 16 per cent of sales with the remaining 10 per cent drawn from developing vendors.

Datatec also has a much smaller Consulting Services arm, which comprises management consultancy Analysys Mason and channel services firm Intact. This division accounted for just two per cent of group revenues but five per cent of EBITDA.

Jens Montanana, chief executive of Datatec, claimed the group had delivered a “solid” performance.

“Our divisional structure, with multiple lines of business and geographic diversification has proved to be a strong asset in the current climate,” he said.

“We have achieved a particularly strong performance in Logicalis, where all regions contributed strongly, breaking through $1bn revenue and five per cent EBITDA margin. As a result, integration services and consulting activities now account for approximately 50 per cent of the Group EBITDA.”