Disruption caused by the installation of new back-office software at distributor Westcon took the shine off parent Datatec's results.
Datatec, which also owns integrator Logicalis, admits it "underperformed" in its fiscal first half to 31 August as Westcon's results fell short following the roll-out of new ERP software at its North American business.
According to its unaudited results, London and Johannasburg-listed Datatec's first-half pre-tax profits fell four per cent to $57.7m (£36m) year-on-year, while revenues rose six per cent to $2.77bn as a number of acquisitions – including that of 2e2's continental European business – bolstered the top line.
While Logicalis performed in line with expectations, Westcon was singled out as the problem child as an ongoing ERP update caused operating disruptions, adversely impacting revenues, particularly in high-volume transaction business.
To date, the system has only been implemented in North America.
Westcon's overall revenues inched up three per cent to $1.96bn as increases in Latin American, Europe and AME offset lower sales in Asia Pacific and a "significant" revenue drop in North America.
The distributor, which draws 48 per cent of its revenues from networking giant Cisco, saw EBITDA fall from $62.1m to $45.7m year-on-year.
Meanwhile, Logicalis saw revenues rise 12 per cent to $767.3m, which included $58.4m from the 2e2 acquisition. Europe accounted for 29 per cent of the total, compared with 26 per cent last year. Its operating profit rose 45 per cent to $32.7m after charges for depreciation and amortisation of intangible assets.
Datatec chief executive Jens Montanana said: "Performance in parts of Westcon's North American business, where the new ERP system has been implemented, has been disappointing. The volume shortfall in that region has been the main reason for the group's underperformance in the period.
"We are experiencing varying trading conditions in many parts of the world with Europe recently showing signs of improvement, while developing markets have been impacted by currency volatility."
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