Trading between March and June was resilient, thanks to its diversified portfolio, says international ICT group Datatec.
In an interim management statement released today, the group says its geographic, technological and operational diversity aided revenue in the first four months of the year. Datatec did not provide any trading figures.
In the year to February, the JSE- and London-listed company increased revenue by 5%, to $4.2 billion from $4 billion in the previous year.
Westcon`s performance exceeded the board`s expectations. However, weak market conditions in the US and UK will impact the performance of Logicalis for the first half of the financial year, compared to the first half of last year. Datatec says this is as anticipated.
Westcon improves
So far, in the current financial year, Westcon has performed better than the last few months of the previous financial year, Datatec says.
Last year, Westcon accounted for 66% of the group`s revenue, although income decreased 3%, from $2.9 billion in 2008 to $2.8 billion. Decreases in the US and Europe were offset by increases in Asia Pacific and Brazil.
The first quarter of the year showed an improvement in operating performance and profitability compared with the last two quarters of last year.
Trading in the Americas has improved modestly, with conditions in Europe remaining stable and performance of the Asia Pacific region still strong. Its emerging market business is now operating profitably and this is expected to improve.
Datatec says Westcon`s performance is predicted to improve over the rest of the year, especially as the cost base has been reduced.
Under pressure
Challenging conditions in the US impacted the Logicalis business, while trading in the UK also softened, although to a lesser degree. The UK and US regions were affected by larger projects being delayed, which impacted the provision of services.
Last year, Logicalis accounted for 24% of Datatec`s revenue, and income for the year improved 19% to $1 billion.
In South America, Logicalis is seeing robust trading and profitability, which is in line with the company`s expectations. This, and a focus on controlling costs in the region, partially countered softer results from the UK and US regions, Datatec says.
Trading in its Consulting Services division has been "tougher" this year as a result of deterioration in demand for strategic consulting services, mostly in the Analysys Mason business.
Datatec says additional cost reductions have been made to improve profitability. The Intact business is performing well.
The group expects to release its results for the first six months to August on 14 October.
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