Datatec

Overview
Price performance
Financials
Research
Thematics

Datatec is a South Africa-listed multinational ICT business, serving clients globally, predominantly in the networking and telecoms sectors. The group operates through three main divisions: Westcon International (distribution); Logicalis International (IT services); and Logicalis LatAm (IT services in Latin America).

Datatec has seen strong growth globally, with elevated demand for networking, cybersecurity and cloud infrastructure. Amid continuing uncertainties, there are signs that global growth is slowing but we expect established technology trends to persist.

Latest Insights

TMT |
Flash note

24.10.24

Datatec — Better profitability across the board

TMT |
Flash note

07.10.24

Datatec — Encouraging H1 across all divisions

TMT |
Update

25.06.24

Datatec — Positive outlook for FY25

TMT |
Flash note

28.05.24

Datatec — Underlying earnings more than tripled in FY24

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Sector

TMT

Equity Analyst

Katherine Thompson

Director

Key Management

Ivan Dittrich

Finance Director
Jens Montanana

CEO

Balance Sheet

Forecast net debt (US$m)

206.8

Forecast gearing ratio (%)

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	6.1	9.8	5.2
Relative	3.4	1.8	(14.6)
52 week high/low	ZAR41.6/ZAR33.6

Financials

Datatec’s H125 results confirmed improved profitability in each division, resulting in a 56% y-o-y increase in underlying EPS to 11.4c. Group revenue declined 5.5% y-o-y, mainly reflecting a shift towards net revenue- reported software, but gross profit increased 3.5% due to a better product mix. Combined with good cost control, adjusted EBITDA increased by 18.5% y-o-y, resulting in a 0.9pp increase in the adjusted EBITDA margin to 4.1%. The group closed H125 with net debt of $108m, down from $123m at the end of FY24. Despite softer European markets, the company expects all divisions to report improved financial performance in FY25. We are reviewing our forecasts.