IT networking and services group Datatec achieved headline earnings of 3.95c a share for the year to end-February, compared with a loss of 6.69c a share the previous year.
CEO Jens Montanana says the turnaround is the result of significant operational and supply chain management improvements within subsidiary Westcon and strong growth within Logicalis and Analysys Mason Group.
At the same time, Montanana says the group expects to make an announcement soon with regard to the formation of a black economic empowerment structure to house the group`s South African interests.
Revenue for the year rose by 8.1% from $2.35 billion to $2.54 billion, while an operating profit of $7.15 million compares with a previous loss of $13.22 million.
An exceptional gain of $50.7 million, relating mainly to gains on the sale of the Logicalis Australia and New Zealand businesses, helped the group to an attributable profit of $52.26 million.
Cash generated from operations amounted to R28.84 million, compared with the prior-year utilisation of $29.02 million cash. The balance sheet shows cash and equivalents of $218.55 million, compared with $185.1 million previously.
Montanana says the liquidity will be important to the expansion of the group`s services businesses and therefore Datatec has not declared a dividend.
He adds that the growth in the world`s major economies over the past two years has moderated.
"However, the IT industry appears to be entering a cyclical upturn and growth in certain sectors is expected.
"In 2004 much progress was made improving the focus and size of our businesses. Market conditions have gradually improved and we expect that better execution and greater operating efficiencies in the group should continue to drive margin expansion and revenue growth."
The Datatec share, which lost 5c to close at 945c on the JSE yesterday, was unchanged this morning.
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