Datatec wary of UK austerity measures

Interim management statement reveals a strong performance from Westcon, but impact of government spending cuts on Logicalis is yet unclear

Going global: Datatec is expecting a strong performance for its financial year, but is concerned about government spending cuts

Westcon is set for a fourth consecutive quarter of growth according to parent company Datatec, but the public sector austerity measures in the UK could yet impact on Logicalis.

In an interim management statement released today, covering the four months from 1 March to 30 June 2010, the South Africa-based firm reported 'stable conditions' in Europe, a 'continuing recovery' in the US and a 'resilient performance' in Asia.

But despite a steadily improving performance for Logicalis, particularly in the US, Asia Pacific and South America, the UK is performing 'satisfactorily' with the long-term impact of government austerity measures in the UK 'unclear', the statement said.

Westcon saw trading increase in the US, Europe and Asia Pacific, with particularly strong trading in Latin America.

Datatec said its overall forecast for the financial year ending 28 February 2011 will remain unchanged from its predictions made on 13 May. Revenues are expected to be between $4.1bn and $4.4bn and profit after tax of approximately $58m.

Operating costs remain tightly controlled and the group remains 'vigilant to any interruption in the overall global economic recovery'.

Jens Montanana, chief executive of Datatec, said: “We are delighted to report that the improvement in trading and profitability reported at our recent full-year results has continued in all of the Group's divisions. We remain cautiously optimistic for the year, in line with our previously published forecasts."