Datatec continues to look for ways to unlock value for its shareholders, focusing on reducing the gap between its share price and underlying assets.
CEO Jens Montanana and his team have been fighting to restore the value Datatec has lost over the years. The majority of those losses are attributed to the firm’s international operations — the bulk of its business — which have struggled over the past decade, resulting in a series of corporate actions to slim down the group.
In addition to value, the group’s strategic review also ensures “that the group is positioned to take full advantage of the positive market dynamics for its technology solutions and services,” Montanana said as the group reported full year earnings to February.
“As part of its initiatives, Datatec broadened its investor relations programme during financial year 2025 and was admitted to the OTCQX trading platform in the US to increase international investor access.”
The OTCQX Market is a platform for companies listed on a qualified international exchange to provide transparent trading to US investors using a dollar-quoted share price.
Datatec also announced a share repurchase programme that started in November 2024.
On Tuesday, the group currently worth R14.05bn on the JSE, reported a strong operating and financial performance across all regions and metrics and has increased its dividend payout policy to 50% of underlying earnings per share (EPS).
The international information and communications technology group reported a 24.6% rise in earnings before interest, tax, depreciation and amortisation (ebitda) to $221.3m for the year to end-February.
Headline earnings per share (HEPS) were up 79.6% to 25.5c, while underlying EPS, which excludes items such as impairments of goodwill and intangible assets, restructuring costs and one-off tax items affecting ebitda, rose 78.4% to 30.5c.
Revenue decreased by 8.8% to $3.6bn, which was mainly due to a mix change and more software and services being net revenue accounted. Gross profit increased by 5.6% to $910.3m.
A dividend of 200c was declared, up 53.8% year on year.
“The improving profitability and cash generation of the group’s divisions enabled us to increase our dividend payout policy to 50% of underlying earnings per share,” said Montanana.
He said the implementation of the new management incentive plans in some of the divisions had resulted in the upstreaming of cash to the parent company in the form of returns on fixed return equity instruments.
Given that there is access to more cash at the parent company, the group is changing its dividend policy to maintain a two-times cover relative to underlying earnings when declaring ordinary dividends. Previously this was three-times cover, he said.
Westcon International’s profit increased by 9.4% to $441.2m, with growth in all regions and a significant increase in Asia-Pacific.
Logicalis International’s adjusted ebitda rose to $94m from $74.1m as a result of restructuring activities undertaken in previous years and increased organic growth.
Logicalis Latin America’s profit decreased to $103.6m from $117.9m due to a decline in revenue mainly from Brazil.
“Increasing IT complexity driven by AI [artificial intelligence] and the significant rise in interconnected digital communities is driving infrastructure demand in areas like networking and cyber security, where we have deep domain knowledge and many years of experience,” said Montanana.
“We expect that the trend toward higher software sales and annuity services will continue, improving the group’s margins and cash flow profile,” he said.
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