Westcon trouble prompts Datatec profit warning

Earnings per share forecast to be 20 per cent lower than expected

Earnings per share at Datatec are expected to be 20 per cent lower than forecast after Westcon suffered from softer trading conditions in the last quarter.

According to an interim statement published today, a mix of tough trading conditions and difficulties stemming from an ERP rollout for Westcon in North America could put a $13m (£7.92m) dent in post-tax profit figures when it announces its full-year results at the end of February. It still expects its revenue for the full year to be within the range of $5.6bn and $5.8bn, compared with $5.25bn in 2013.

"Westcon has continued to be impacted by the ERP transition in North America and particularly in high-volume transaction business, as well as softer trading in some markets that have seen weaker currencies versus the dollar," said Datatec.

The firm added that its Logicalis division had a "robust" quarter despite operating in challenging markets.

Datatec also toady announced a top management rejig which will see its chief financial officer Rob Evans become group operations director from the start of June. Evans will be replaced by Jurgens Myburgh who will join the firm from the Standard Bank of South Africa at the start of May before taking over fully when Evans changes role.

Datatec chief executive Jens Montana remained optimistic despite the profit warning and said the changes at the top will help.

"Notwithstanding the disappointing performance in Westcon US operations, we are confident that the issues are being addressed and our recent moves to strengthen Westcon's leadership team should quickly improve operating execution," he said.

"The business remains well positioned to continue to trade successfully and regain momentum. The performance of Logicalis and Consulting Services across all regions remains solid."