Datatec, facing continued softness in its Westcon business, is moving its CFO into the position of group operations director, a position created because of the growing "scale and complexity" of its operations.
Rob Evans will move into his new position from 1 June and will be succeeded by Jurgens Myburgh, who will join the company as CFO designate on 1 May. Evans replaced Ivan Dittrich, who left the group to become Vodacom's CFO in mid-2012.
Datatec CEO Jens Montanana says the "size and complexity of the group now merits the position of a group operations director". Evans will be responsible for business process improvement, internal audit, post-acquisition integration oversight and internal corporate development.
Montanana says Evans is suited for this new position due to his broad international experience, including over 10 years in various operating and finance roles across Datatec.
Myburgh, a chartered accountant, joins Datatec from Standard Bank, where he is currently head of mergers and acquisitions, a post he has held since 2009. He joined the bank in 2001 and was appointed executive VP of mergers and acquisitions in 2007, before being promoted.
Montanana adds Myburgh has a strong corporate finance background and extensive international mergers and acquisitions experience.
Slow going
Meanwhile, Datatec continues to experience a challenging time at its Westcon business, its largest unit, it says. Although it still expects revenue to come in at between $5.6 billion and $5.8 billion for the full year - a gain on last year's $5.25 billion - it warns profits will be lower.
The dual-listed company explains this is because of slower trading at Westcon, the impact of the Westcon enterprise resource planning transition in North America and a non-cash provision of up to $20 million related to the recoverability of certain assets in Westcon North America.
Westcon is Datatec's largest unit in terms of revenue, accounting for 71% of turnover. In the first half of the year, it reported a "disappointing" performance as it was adversely impacted by rollout of an ERP system in North America, which had a big effect on transaction volumes, says Datatec.
The entity is still being affected by the project and has also seen softer trading in some markets that have experienced weaker currencies against the dollar, Datatec explains.
Montanana says despite the disappointing performance in Westcon's US operations, Datatec is confident the issues are being addressed and its recent moves to strengthen Westcon's leadership team should quickly improve operating execution. This month, the entity's new CEO, Dolph Westerbos, joined the company, taking over from Dean Douglas.
"The business remains well positioned to continue to trade successfully and regain momentum," says Montanana.
Taking a knock
Datatec adds the provision alone could trim its post-tax profit by as much as $13 million and earnings per share by up to seven US cents. Datatec's board expects headline and earnings per share to be as much as 20% lower than previously forecast.
The group previously said underlying earnings per share were forecast to be 43 US cents, down from its initially expected 50c and flat year-on-year.
Despite saying it would maintain its 17 US cents dividend, the news of lower profitability dragged its stock down 4.13%, to close at R49.18. The JSE's all share index gained a percent yesterday.
Datatec says Logicalis continued to see robust trading, and Analysys Mason was again the strongest performer in the Consulting Services division. Its results should be published on 14 May.
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