Datatec`s latest set of final results will reflect a boost in earnings per share (EPS) and headline earnings per share (HEPS), says the Johannesburg- and London-listed ICT group.
In a trading statement, the company says it expects EPS to move up to 34 US cents and HEPS to climb to 36 US cents. Datatec`s previous trading statement indicated EPS and HEPS would be up by between 24 US cents and 29 US cents.
According to the company, the increase comes in the form of $16.8 million of unrealised profit, thanks to a decrease in the fair value of its put option liabilities.
Datatec will be even more pleased with the earnings increase than it was at the end of March, when it released its first trading statement for the year. The company has been fairing stronger than expected over the year, considering the global credit crisis.
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, which the company says 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.
Despite the high expectations for the company`s coming financial year-end results, it seems to be shoring what it can closer to home.
Last week, it gave up its 55% shareholding in empowerment business African Legend Indigo, moving those resources into its Westcon business. Datatec used a share-swap deal to gain full ownership of Westcon.
The group expects to release its preliminary results for the year ended 28 February on 14 May.
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