South Africa: Datatec Up in Tough Market
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Business Day (Johannesburg)
16 July 2008
Posted to the web 16 July 2008
Lesley Stones
Johannesburg
TECHNOLOGY company Datatec is continuing its strong recovery of the past few years, with tough economic conditions failing to dent its performance for the first quarter to May 31.
Trading for the period was strong thanks to its broad geographic spread and diversity of services it supplies.
The update came in an interim management statement for the quarter, issued yesterday, triggering a midmorning rise in its shares to R23,65. Despite the positive update, its shares are worth barely half their value of a year ago, when they touched a 52-week high of almost R45.
The statement said continuing economic softness in the US and slower market conditions in Europe would not stop Datatec from delivering good revenue growth for the first half of the year and an improved performance over last year.
Revenue is expected to top $2,2 billion for the six months to August 31, as against $1,9 billion for the six months to last August.
Operations in South America, Africa, the Middle East and Asia-Pacific made strong contributions, to mitigate lower growth in the US and Europe.
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Datatec's largest subsidiary is Westcon, which distributes IT equipment. A subdued performance in the US and slower growth in Europe were offset by robust performances in South America and Asia-Pacific, so its first-half revenue should be better than last year.
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