Datatec previously issued a trading update for FY25 confirming that both Westcon and Logicalis International continued to deliver excellent financial performances in H225, and despite generating lower gross profits year-on-year in FY25, Logicalis Latin America delivered an overall increase in financial performance. Management has now confirmed the ranges it expects to report for EPS, with underlying EPS of 30.0–31.0 cents ahead of our 27.9 cents forecast. We maintain our forecasts pending results on 27 May.

Datatec’s FY25 year-end trading update confirmed that the strong operational performance reported in H125 continued into H225, with particular demand for cybersecurity and hybrid cloud infrastructure solutions. For FY25, the company expects to report group gross profit growth of 6% y-o-y, slightly ahead of our forecast. Westcon International and Logicalis International expect to report gross profit growth and excellent financial performance. While Logicalis Latin America expects to report a lower gross profit year-on-year, its overall financial performance improved versus FY24. We maintain our forecasts pending FY25 results on 27 May.

Logicalis International is the second largest business within the Datatec group, generating a third of adjusted EBITDA in FY24. With international presence and strong vendor relationships, the business provides digital transformation services to companies across a wide range of sectors, specialising in networking, cybersecurity and cloud services. We calculate that the enterprise value (EV) of Logicalis International, based on average peer multiples, is similar to the current EV of the Datatec Group, highlighting the valuation discount at which the group is currently trading.