ICT group Datatec says it has delivered "satisfactory" performance from 1 March to 30 June, the period under review in an interim management statement (IMS) the company published today.
"Overall group revenues are higher than those for the four months ended 30 June 2013 (the comparative period). Westcon's financial performance continues to improve as it successfully addresses the operating issues experienced during the financial year ended 28 February 2014. Logicalis is experiencing a slow-down in trading, most of which was anticipated as part of the FIFA World Cup, in Brazil," says Datatec.
On 14 May, the group published a forecast for the financial year ending 28 February 2015 (FY15), which puts revenue above $6 billion and underlying earnings per share at more than 40 US cents.
"This forecast was based on the following assumptions: revenue growth will be largely driven by an improved performance at Westcon; Westcon's revenues will constitute approximately 72% of the total revenue mix and Logicalis' revenues 27%; a small improvement in operating margins at Westcon and Logicalis; [and] an effective group tax rate of 34%," the company states.
The IMS also states the slowdown at Logicalis' Brazil unit is expected to impact group earnings at the half-year reporting stage. "However, based on current exchange rates, market conditions and the increased backlog at Logicalis, the group's forecast for FY15 remains unchanged."
The company says its Westcon division has achieved revenue growth of 11% over the comparative period. "Growth was achieved in all geographical markets except Asia Pacific. In North America, revenues were 17% higher over the comparative period. Gross margins have been sustained relative to the comparative period."
Logicalis reported revenue 8% below that of the comparative period, Datatec says in its IMS. The FIFA World Cup resulted in telecommunications and service providers suspending installation activities on their networks, it adds.
"Logicalis' sales backlog indicates that business should return to expected levels, but this effect will skew the division's results more towards the second half of FY15. Gross margins continued to improve as the share of annuity services revenue continues to grow in the sales mix," the company says.
The group expects to release its half-year results for the six months ending 31 August on 15 October.
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