Datatec (“Datatec” or the “group”, JSE and LSE: DTC), the international ICT group, is currently finalising its results for the six months ended 31 August 2009 (“the period”), which are expected to be published on SENS on 14 October 2009.
On 14 May 2009, the group published a profit forecast for the full 2010 financial year of revenue of between $3.7 billion and $4 billion, underlying* earnings per share of approximately 29 US cents and earnings and headline earnings per share of approximately 23 US cents. This forecast remains unchanged.
Datatec advises that revenue of approximately $1.8 billion was generated during the period, with gross margins remaining stable. The strong cash generation experienced during the previous financial year has continued during the period.
Underlying earnings per share
Underlying* earnings per share for the period are expected to be between 11 and 12 US cents per share, compared to 10.6 US cents per share for the six months ended 28 February 2009 and 22.5 US cents per share for the six months ended 31 August 2008 (the “comparative period”).
Put option liabilities
Under IFRS, the group recognises liabilities against equity for put options held by minority shareholders in subsidiaries and at each reporting date changes in the fair value of such liabilities are booked in the income statement.
An increase in the fair value of put option liabilities has resulted in unrealised additional expense of $6.4 million for the period, compared to a gain of $16.8 million in the six months ended 28 February 2009.
Underlying earnings per share are unaffected by this unrealised expense and there are no cash implications associated with this accounting treatment.
As a result, the board expects earnings per share and headline earnings per share for the period to be between four and five US cents per share, compared to 17.6 US cents per share in the comparative period. Excluding the increase in the fair value of put option liabilities, earnings per share and headline earnings per share would have been between eight and nine US cents per share.
Financial information
The financial information on which this announcement is based has not been reviewed and reported on by Datatec's auditors.
* Underlying earnings per share excludes goodwill and intangibles impairment, amortisation of intangible fixed assets, profit or loss on sale of assets and businesses, fair value movements on put/call options and unrealised foreign exchange movements.
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