Shares in Datatec shot up 10% on Tuesday as the international ICT company said it expected its headline earnings to more than double at the halfway stage of its financial year, as all its divisions contributed strong financial performances.
Established in 1986, the company, one of the JSE’s largest ICT services firms, operates predominantly from two main divisions, Logicalis and Westcon International, the latter distributing security and networking technology products.
Headline earnings per share for the six months ended August are expected to be 21-23 US cents, more than 100% higher than 10.5c a year ago, the group said on Tuesday.
Datatec said Westcon maintained its expanding margin and continuing strong profit growth trajectory, while Logicalis International’s improved operational leverage drove much higher profitability. Logicalis Latin America delivered a considerably improved performance compared with a year ago.
The board continued to monitor and assess peer reporting and best practice in defining its underlying earnings, Datatec said.
In line with peer reporting, the group decided to present underlying earnings excluding share-based payments, and that change had been applied from the 2026 financial year, the company said.
Underlying earnings per share (EPS) were forecast to be 18c-20c from a recalculated 13.5c a year ago, it said. Underlying EPS excludes impairment of goodwill and intangible assets, profit or loss on sale of investments and assets, amortisation of acquired intangible assets, acquisition-related adjustments and fundamental restructuring costs, among others.
At 2.03pm, Datatec shares were up 9.83% at R66.33. The group, which is valued at R14.2bn on the JSE, has seen its share price rise 37.62% in the year to date.
The group’s CEO, Jens Montanana, said at the release of the 2025 annual results that the increasing IT complexity driven by AI and the significant rise in interconnected digital communities were driving infrastructure demand in areas such as networking and cybersecurity, in which the group has deep domain knowledge and many years of experience.
“We expect that the trend towards higher software sales and annuity services will continue, improving the group’s margins and cash flow profile,” he said.
Montanana and his team have been fighting to restore the value Datatec has lost over the years. Most of those losses are attributed to the company’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.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.