The current fiscal year ends on 28 February for the South African firm, which is the parent company of Logicalis and Westcon. Datatec said it is expecting to announce revenue of $4.3bn, up seven per cent on last year, although operating profit is expected to decline by a fifth to $120m.
Datatec said business in the four months to the end of 2008 had remained brisk, although had fallen short of the board's initial expectations. The company said profit had been hit by a cost base that had been sized for greater revenue, and was also impacted by the US dollar's swift appreciation against UK, Australian, Brazilian, Turkish and South African currencies.
The firm indicated it remained focused on reducing operational expenses, having already initiated $20m of annual savings during the last third of 2008. It claimed Westcon would enter the coming fiscal year with a much lower cost base than 12 months ago. Datatec revealed the distributor had endured a mixed year to date, with robust performances in South America and the Asia Pacific region partly offsetting a weaker year in Europe and the US.
Datatec said Logicalis was set to enjoy a solid year despite its South American revenues being hit by the Brazilian real's depreciation against the dollar. Consultancy subsidiary Analysys Mason is set to meet Datatec's expectations for revenue this year, although it too has lost out as the dollar has strengthened.
Chief executive Jens Montanana said: "Our diversified business model, with global scale and no single geographic, technological or business segment dependency is a demonstrable advantage in these challenging times. We have continued to reduce our cost base to reflect the market conditions.
"Good balance sheet management and strong cash generation remain a priority to help insulate us against the worst effects of the current economic climate and prepare for recovery when it arrives."
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