Logicalis parent mourns loss of 'significant' Welsh deal

Datatec remains upbeat as operating profits at Logicalis and Westcon soar

Logicalis and Westcon parent Datatec has hailed success across both divisions for its FY14 despite admitting the former's UK unit was dented by the loss of an important public sector deal.

For the 12 months to 28 February, Datatec – which consists of Weston, Logicalis and a Consulting Services arm – saw operating profit jump 29.3 per cent annually to $157.8m (£100.8m) on sales which over the same period rose 13.3 per cent to $6.4bn.

Over the same period, Westcon's operating profit rocketed 62 per cent to $100.2m while sales jumped 19.4 per cent to $4.9bn. At Logicalis, operating profits rose 9.8 per cent to $74.2m for the year on revenue which slumped six per cent to $1.5bn.

Datatec said Logicalis was cashing in on services but was burnt by the loss of a key deal.

"Organic revenue [at Logicalis] was down three per cent," the firm said. "This reduction reflected lower product sales (down 4.9 per cent year on year) across the main vendor categories – Cisco, IBM and HP – and only partially offset by increases in other vendor categories.

"Revenues from total services were up 7.9 per cent, with increases in both professional services and annuity service revenues. This change reflects customers' increasing shift towards, and Logicalis' response to, services-based solutions.

"In Europe, the UK results were significantly impacted by the loss of a long-term contract with the Welsh Assembly Government."

Datatec said a cloud push was good news for Westcon.

"In August 2014, Westcon acquired the assets of Verecloud, a developer of an advanced distribution platform for cloud and services solutions," it said. "The platform is being incorporated into Westcon's Cloud Solution Practice and will help resellers drive significant revenue from cloud-enabled services.

"Westcon also continued globalisation of core vendor relationships, including Palo Alto Networks. The expanded partnership opens new markets for the industry's fastest-growing enterprise security platform, permitting resellers to leverage highly integrated global distribution capabilities."