Datatec on course for full year

The South Africa-listed parent of Westcon and Logicalis has issued a relatively buoyant trading update following the end of its financial year.

Datatec said its financial performance for the year to 28 February remains in line with expectations set in mid-January, when it forecast revenues of $4.3bn (£3.1bn) and EBITDA of $120m.

Datatec revealed that operating cash generation at distribution arm Westcon had been “very strong” in the second half of the year. The group moved from a net debt to a net cash position at the end of the period.

However, the firm tempered its message by warning that product revenues have been tracking at 10 to 15 per cent lower than last year.

But it did add that services and consulting revenues have been less impacted by the current economic climate and some areas, such as annuity services revenues, have improved year on year.

Jens Montanana, chief executive of Johannesburg-based Datatec, said in a statement: “The group completed the year with improved working capital and a net cash position, following strong cash generation in the second half, illustrating both the defensive nature of our business model and the positive actions taken.

“We plan to pay the same level of capital distribution for the year just completed, reflecting confidence in our financial position, particularly when some parts of the group are performing with relative resilience in the downturn.”