Edison Investment Research - Datatec Ltd. (10BN) Datatec - Focus on Westcon International

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Edison Investment Research

Richard Williamson

Datatec - Focus on Westcon International

Since embarking on a restructuring of the Westcon International (Westcon) division in FY18, management has grown divisional revenue at a CAGR of 5.7% (FY18–22) and improved profitability. Westcon has set ambitious targets in its latest medium-term plan (FY23–27), supported by its ongoing digital transformation programme. With our valuation of Westcon higher than the current enterprise value of the group, we believe that successful achievement of this plan could unlock significant shareholder value.

23/02/2023 1 EN

Underlying

Datatec Ltd.

Datatec is an international information and communications technology (ICT) business with operations in over 60 countries across North America, Latin America, Europe, Africa, Middle East and Asia-Pacific. Co.'s segmental include: Westcon, which is engaged in the distribution of networking, security, and unified communications products and data center solutions; Logicalis, which is engaged in ICT infrastructure solutions and services; Consulting Services, which is engaged in strategic and technical consulting; Corporate, which is comprised of head office companies including Datatec Financial Services, a new capital/leasing business under development and consolidation adjustments.

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ZAE000017745 Johannesburg Stock Exchange South Africa

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Richard Williamson

Other Reports on these Companies

Edison Investment Research

Datatec - FY24 underlying EPS more than doubles y-o-y

In a second more detailed trading update for FY24, Datatec confirmed revenue growth of 6% to $5.46bn, with Westcon International delivering excellent performance, Logicalis International having a strong H2 and Logicalis Latin America affected by difficult market conditions in Argentina and Brazil. The company also provided provisional EPS data, with reported EPS likely to come in ahead of our forecast and underlying EPS just below our forecast. We maintain our forecasts pending FY24 results on or around 27 May.

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Datatec - FY24 revenue growth of 5.8%

Datatec expects to report revenue of $5.44bn for FY24, up 5.8% y-o-y, and noted that the quality of earnings improved in the year. During H224, Westcon International continued to deliver a strong financial performance. Logicalis International also had a strong half, although its reported revenue growth has been suppressed by a higher proportion of net revenue-reported software sales. Logicalis Latin America had a tougher H2 due to difficult market conditions in Argentina and Brazil. We maintain our forecasts pending FY24 results, which are expected to be on or around 27 May.

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Datatec - On track for better performance in FY24

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Datatec - Focus on Westcon International

Datatec - FY24 underlying EPS more than doubles y-o-y

Datatec - FY24 revenue growth of 5.8%

Datatec - On track for better performance in FY24

Basilea Pharmaceutica - Cresemba milestone payments continue to roll in

AAC Clyde Space - Solid start to the year with further order growth

Tinexta - Typical seasonality in Q124

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