Datatec Anticipate 17% Rise in Revenues

Datatec, the international ICT group best known in the UK through the activities of distributors Westcon and Comstor and Logicalis, has announced a year end trading and earnings update for the year ended 28 February 2007.

The group’s financial performance has improved for the fourth successive annual reporting period with a strong performance in the second half of the last financial year.

The group’s consolidated revenues are expected to increase by 17% to almost $3.5 billion (2006: $2.98 billion). Revenues at Westcon have grown by approximately 10% to over $2.5 billion (2006: $2.28 billion), while Logicalis’ revenues have grown by more than 40%, of which 11% was organic, to over $750 million (2006: $546 million).

Analysys Mason revenues were similar to the prior year at $60 million, despite the completion of a significant multi-year contract at the start of the year. Emerging market activities covering South Africa and the Middle East, also posted strong gains in revenues.

The momentum behind the increase in EBITDA margins and operating profit margins has continued with the Group expecting to report EBITDA of approximately $117 million (2006: $85m). This includes an unrealised foreign exchange gain of approximately $5 million (2006: $1 million).

EBITDA margins at Westcon have increased, mainly as a result of improved performance in the European and Asia Pacific businesses. Logicalis has maintained its healthy EBITDA expansion, driven by the improved efficiencies derived from the additional critical mass gained from acquisitions. Analysys Mason had a similar year-on-year EBITDA performance. Emerging markets contributed strong gains in EBITDA profits.

Headline earnings per share and earnings per share for the year ended 28 February 2007 are expected to be between 35 and 38 US cents (2006: 26.91 US cents and 26.54 US cents respectively).

The group reports solid progress being made with acquisitions in the second half. NOXS, the pan-European security distributor, and CSF, a UK-based solutions provider and service organisation of HP and IBM technologies, were acquired for an aggregate consideration of $82 million. Together, these acquisitions will continue to improve the Group’s vendor product and technology mix, drive a greater services contribution and further develop the recurring revenue base. They will also contribute to the ongoing margin improvement expected in the operating divisions as a result of greater scale and efficiency.

The Group expects to announce its preliminary results for the year ended 28 February 2007 on 16 May 2007.