Datatec warns over Westcon

Slow distribution sales mean IT group may miss full-year forecasts

Weak market conditions in Europe have blown Westcon parent Datatec's full-year results off course.

Datatec warned this morning that it will probably pull up short of its published 2013 forecasts due to slowing sales over the past month and a half at Westcon, its distribution arm.

Trading at its other major business, systems integrator Logicalis, continues to be in line with expectations, the Johannesburg and London-listed firm added.

Spooling back to May, Datatec had hoped to post revenue of between $5.5bn (£3.4bn) and $5.8bn for its year to 28 February 2013, up from $5.03bn in fiscal 2013. Pre-tax profit was forecast to hit $104m.

"The board now considers it unlikely that the Group will reach its published forecasts," Datatec stated, adding that trading at Westcon had been both lower than expected and comparatively behind the same period last year.

Westcon has been hit by "continued weak conditions in Europe", from where it draws a third of its $1.91bn annual sales. But trading in North America - which contributes 34 per cent of sales - was also affected by Storm Sandy and slowing federal sales.

Westcon draws a rising percentage of sales from emerging markets and on Friday bolstered its African business by acquiring networking distributor Comztek.

At last count, 14 per cent of sales came from Latin America, 11 per cent from Asia-Pacific and eight per cent from AIME.