Logicalis grows but UK "challenging"

Parent Datatec enjoys "solid" six months to 31 August

Logicalis is the latest large VAR to suffer a revenue drop in the UK as parent Datatec admitted the market here remains challenging.

Total revenues at the South Africa-listed IT group rose seven per cent to $2.62bn year on year for the six months to 31 August, with pre-tax profit flat at $60.4m.

Datatec, which also owns distributor Westcon, labelled it a "solid performance" given the weakening economic backdrop.

Logicalis in particular fared well, as revenues at the IT solutions and managed services specialist pogoed 13 per cent to $682m. Thanks to solid growth with HP, its product sales rose 10 per cent, while Logicalis' services revenue powered up 25 per cent.

However, Datatec said that the UK market "remained challenging" for Logicalis as the country's share of the total declined from 28 to 24 per cent year on year. This means its revenue fell slightly - from about $168.5m to about $164m, using rough calculations. North America now contributes 32 per cent of the total.

Cisco and Avaya distributor Westcon endured a more "challenging" six months, Datatec said.

Westcon's revenues rose six per cent to $1.9bn, with 33 per cent of the total coming from Europe. Cisco products made up 51 per cent of the mix, with 13 per cent drawn from Avaya and 20 per cent from security franchises including Check Point.

Jens Montanana, chief executive of Datatec, said: "As we highlighted in our IMS statement in July, overall revenues and underlying earnings are continuing to improve but the rate of growth has slowed as the macro-economic climate has become more uncertain. This became more pronounced in the second quarter in all regions with the exception of Latin America."