Channel titan Datatec's 2014 fiscal year is off to a topsy-turvy start, with Logicalis going from strength to strength but Westcon's performance remaining "persistently weak" in Europe.
An interim management statement issued today by the South Africa-based monolith reveals that sales for the four-month period to the end of June were "similar" to the corresponding period last year. But the underlying profitability of the business and the earnings-per-share figure are set to come in "slightly lower".
The statement outlines that "trading conditions remain largely the same as in the second half of the financial year ended 28 February 2013". Datatec's recently published annual results revealed strong top- and bottom-line FY13 growth for Logicalis, but declining profits at its distribution arm.
The first third of the new year has seemingly brought more of the same, with the UK-based integrator making a "strong start... reporting overall revenue and operating profit growth". There has been a healthy increase in Logicalis' annuity revenue, its parent claims, while each of the four European 2e2 businesses acquired in March "have contributed positively".
Westcon has endured a much more up-and-down period, with the emerging markets of Latin America, the Middle East and Africa reporting revenue increases, with Europe showing modest growth. The distie's Asia-Pacific turnover was down, while "operating disruptions" caused by the rollout of a new SAP ERP platform put a dent in North American revenue.
Datatec's Consulting Services arm posted an improved performance during the period, said today's statement, with Analysys Mason enjoying increased profitability.
Jens Montanana, chief executive of Datatec, said:"We remain cautious about the prospects for growth in the geographies in which we operate. However, our global footprint and the diversity of our business streams continue to provide resilience in these mixed trading conditions.
"At Westcon the strongest performance has been in developing markets, Europe remains persistently weak and the recent SAP implementation in North America has affected volumes in the short term. We are focused on improving Westcon's operating margin. We are very pleased with the continued robust performance at Logicalis."
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