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Datatec posts solid growth

Parent company of Logicalis and Westcon sees turnover rise 17 per cent

CRN, 17 May 2007

Datatec, the parent company of VAR Logicalis and distributor Westcon, has posted a 17 per cent rise in turnover for the 12 months to 28 February.

The Johannesburg and AIM-listed IT group hauled in revenues of $3.2bn for the year, up from $2.7bn a year earlier on the back of both acquisitive and organic growth.

Westcon grew turnover by 10 per cent to $2.3bn, which Datatec attributed to strong demand for Cisco and Nortel products. The distributor relied on Cisco for 60 per cent of sales, with 13 per cent coming from Nortel, nine per cent from Avaya and four per cent from security products.

Logicalis, which operates in Europe, North America and South America, also enjoyed a solid year as revenues powered up 37 per cent to $693m. The reseller drew 43 per cent of sales from IBM, 22 per cent from Cisco and 21 per cent from Hewlett-Packard.

Although this is Datatec’s fifth successive year of financial improvement, fiscal 2008 is set to be an even more pivotal year as the group beds down several sizable acquisitions.

Since the year end, Westcon has closed two large European acquisitions, first paying about $69m for security distributor Noxs (CRN, 30 April) before shelling out approximately $41m for UK comms distributor Crane (CRN, 4 May).

Datatec said it was targeting a $1bn jump in annualised revenues during the next year.

Jens Montanana, chief executive at Datatec, said: “We have achieved another year of strong organic growth across the group with notable increases in profitability and market share from Westcon and Logicalis, and an increasing contribution from emerging markets.

“We have also completed a number of acquisitions around the world which have significantly increased Datatec’s scale, as well as enhanced our product mix and geographical presence. All of these factors have enabled us to grow our profits and improve our margins.”