Datatec has reported an operating profit of $1.06 million for the year to end-February, compared with a loss of $5.36 million for the previous year.
Datatec CEO Jens Montanana says the operating profit is still low because of continuing margin pressure in the industry as a consequence of difficult trading conditions in the sector, costs associated with consolidating operations and foreign exchange translations losses from the continuing strength of the rand.
Group revenue rose from $2.06 billion to $2.35 billion, with revenue from ongoing operations up from $1.97 billion to $2.23 billion. Earnings before interest, tax, depreciation and amortisation rose from $18.25 million to $23.79 million.
An attributable loss of $40.98 million compares with a loss of $31.51 million previously, while a headline loss per share of 6.59 US cents was an improvement over the previous loss of 7.14 US cents per share.
Montanana says US-based Westcon, which accounted for about 80% of revenue, cut staff numbers by 19.8% to 1 065, with the bulk of the cuts taking place in Europe, where numbers were reduced from 711 people to 509.
Logicalis also experienced headcount reduction, with staff numbers at continuing operations down from 775 to 657.
Montanana is expecting improved results in the current 2005 financial year. "There are some positive signs for the global economy. The rise in long-term interest rates, oil price and other inflationary pressures suggest a cyclical recovery is under way. The market leaders in our sector have all guided positively and had better results recently - HP, IBM and Cisco," he says.
"And across the group the first few months of this year have been more positive. Bookings and backlog in all our divisions are at the highest point of the last two years."
By late this morning the Datatec share was trading at R10.40 on the JSE, up 10c on yesterday`s close.
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