Johannesburg- and London-listed ICT group Datatec today issued a moderately upbeat trading statement, saying earnings for the year ended February would be in line with earlier expectations.
The statement says Datatec's board expects earnings per share and headline earnings per share to be between 25 US cents and 29 US cents per share (about 250 SA cents and 290 SA cents). Underlying earnings per share are expected to be between 31 US cents and 35 US cents per share (about 310 SA cents and 350 SA cents).
It also says the board plans to pay the same level of annual capital distribution at 12 US cents per share this financial year as it did for the last.
Although the group has seen a drop in product revenue of between 10% and 15%, this has been more than offset by services and consulting, which have been less impacted by the current weak economic climate.
Datatec's US subsidiary, Westcon, has also exceeded expectations and overall cash generation has been particularly pleasing.
“At the end of the financial year, Datatec moved to an overall net cash position from a previous net debt position,” the statement says.
Jens Montanana, Datatec CEO, says: “The group completed the year with improved working capital and a net cash position, following strong cash generation in the second half, illustrating both the defensive nature of our business model and the positive actions taken.
“We plan to pay the same level of capital distribution for the year just completed, reflecting confidence in our financial position, particularly when some parts of the group are performing with relative resilience in the downturn.”
Datatec's share price surged 3.89%, to R11.22, this morning in moderate trading volumes.
The group expects to release its preliminary results for the year ended 28 February on 14 May.
Related stories:
Datatec reports solid interims
Datatec enters 'lucrative' India
Share