'We have seen a structural shift in our business' - CEO of Westcon and Logicalis parent

Westcon revenues power up 4.5 per cent to $2.6bn, while Logicalis suffers 14 per cent top-line decline

Westcon and Logicalis have seen a "structural shift" in their business from hardware towards software and services, the CEO of parent Datatec said as he unveiled "broadly flat" annual revenues for the group.

The Johannesburg-listed IT group this morning unveiled revenues of $4.1bn for its year to 28 February 2021, a 2.5 per cent fall on the $4.2bn restated revenues recorded the previous year.

Adjusted EBITDA fell 11 per cent to $141m.

Datatec CEO Jens Montanana said Datatec's businesses have benefited from providing "many of the products and services required to support a remote IT networked-based way of doing business".

But growth at distribution arm Westcon was more than offset by a top-line decline at Logicalis.

ICT solutions arm Logicalis saw revenues tumble 14 per cent to $1.45bn, with adverse currency translations in Latin America not helping its cause. Its adjusted EBITDA fell from $123.9m to $96.1m.

Although Logicalis has encountered short to medium-term trading uncertainties, the technology segments it specialises in "are key parts of cloud infrastructure and the remote access computing solutions necessary to adjust" to Covid, Datatec claimed. It counts Cisco, NetApp, Microsoft, VMware, IBM, HPE, ServiceNow and CA Technologies among its key vendors.

Logicalis' European business grew, it added.

In contrast, Cisco and Avaya distributor Westcon saw revenues power up 4.6 per cent to $2.6bn thanks to "strong demand for networked cloud computing, remote access solutions, UC and networking security. Its adjusted EITDA also bounced from $40m to $52.5m.

During the year, Datatec increased its share in Westcon International from 90 to 92.1 per cent via a capitalisation. This left US distributor Synnex - which acquired Westcon's American business in 2017 - with a 7.9 per cent stake.

Looking ahead, Datatec claimed its division are in a "strong position" with "solid order book related to remote working, cloud access and fixed or mobile secured networking".

Montanana hailed the group's "solid execution" during the year.

"[The] digitisation trend is set to continue and we have already seen a structural shift in our business away from many forms of traditional hardware to software and services with growing annuity revenue."