Currency in ZAR
Last close As at 08/06/2023
ZAR38.58
▲ 1.20 (3.21%)
Market capitalisation
ZAR8,677m
Research: TMT
Datatec expects to report FY23 revenue of $5.16bn, which represents growth of 13% compared to FY22 and is 3% ahead of our forecast. Westcon performance was well ahead of our expectations, with Logicalis International slightly ahead and Logicalis Latin America below. Overall, the group saw signs of improvement in the supply chain, although the backlog remained elevated at the year-end. The secular growth in networking and cyber security solutions continues to be the main driver of demand. We maintain our forecasts pending full FY23 results in May.
Datatec |
Another year of double-digit revenue growth |
FY23 trading update |
Software and comp services |
27 March 2023 |
Share price performance Business description
Analyst
Datatec is a research client of Edison Investment Research Limited |
Datatec expects to report FY23 revenue of $5.16bn, which represents growth of 13% compared to FY22 and is 3% ahead of our forecast. Westcon performance was well ahead of our expectations, with Logicalis International slightly ahead and Logicalis Latin America below. Overall, the group saw signs of improvement in the supply chain, although the backlog remained elevated at the year-end. The secular growth in networking and cyber security solutions continues to be the main driver of demand. We maintain our forecasts pending full FY23 results in May.
Year end |
Revenue |
PBT* |
Diluted EPS* |
DPS |
P/E |
Yield |
02/21** |
4,109 |
73.1 |
13.2 |
6.6 |
14.9 |
3.4 |
02/22 |
4,546 |
69.1 |
14.2 |
39.3 |
13.8 |
20.0 |
02/23e |
5,017 |
74.3 |
20.2 |
69.9 |
9.8 |
35.6 |
02/24e |
5,282 |
95.6 |
23.3 |
7.5 |
8.4 |
3.8 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Includes Analysys Mason.
Datatec disclosed FY23 divisional revenue: Westcon $3,420m, 5% ahead of our $3,264m forecast and up 18% y-o-y; Logicalis International $1,250m, 2% ahead of our $1,229m forecast, up 10% y-o-y; and Logicalis Latin America $490m, 7% below our $525m forecast, down 6% y-o-y. Based on H123 year-on-year revenue growth rates of 16.1%, 5.6% and -21.3% respectively, this implies H223 year-on-year revenue growth accelerated for all divisions, at 20.4% for Westcon, 14.6% for Logicalis International and 10.8% for Logicalis Latin America. While Logicalis Latin America H223 revenue was below our expectations, the division returned to growth in the period.
Group revenue growth of 13% in FY23 follows growth of 11% in FY22, despite both years being negatively affected by supply-chain constraints. The elevated backlog at the year-end provides support for our FY24 forecast for revenue growth of 5%.
We plan to review our forecasts when Datatec reports full FY23 results, expected around 23 May.
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Research: Industrials
Carr’s Group has released its audited results for FY22, having previously issued a detailed trading update in February giving preliminary financial metrics on FY22 performance. The shares were suspended from trading in January because of delays in publishing these results. The company has applied for them to be restored to trading.
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