| Wed 25 Sep 2002, 9:43 | | Datatec Trading Update And Reorganisation |
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Datatec trading update and reorganisation
Datatec Limited
(Registration number 1994/005004/06)
Share Code: DTC
ISIN: ZAE000017745
Datatec trading update and reorganisation
25 September 2002
Trading update
In light of the recent weakness in the Datatec share price, management believes
it is appropriate to provide an update on the trading conditions currently being
experienced by Datatec.
In line with disclosure made in the 2002 Annual Report, Datatec results will be
impacted by the expected initial trading losses associated with the recently
acquired Landis Business Partners operation in Europe and by the foreign
exchange losses from the appreciation of the Rand relative to the prior year.
The results will also be impacted by the lower margins in the industry, in line
with expectations. As a result of the foregoing, management expects headline
earnings per share ("HEPS") for the six months to 30 September 2002 to be
substantially below those reported for the six months to 30 September 2001.
In the first half of the financial year, Datatec has improved working capital,
generating free cash flow through a reduction in inventories and better
management of current assets, to provide a stronger balance sheet.
Management believes that revenues have stabilised but, as indicated previously,
no recovery is expected until at least calendar 2003. Nevertheless, the company
expects to deliver higher HEPS in the second half of this year, compared to the
first half.
Group reorganisation
Datatec is to continue streamlining operations, shorten reporting lines and
further reduce costs by combining the head office functions of Logical, its
integration services arm, with those of its Datatec head office functions.
Logical will continue to operate as a separate division, with international
operations in 10 countries. Sister companies Mason and RangeGate will become
more closely integrated with Logical to provide greater leverage across
customers and resources. Datatec expects, in future years, to save at least $2-
million in annualised costs by combining head office functions.
Datatec Chief Executive, Jens Montanana, will assume immediate responsibility
for the day-to-day management of Logical operations, together with his duties as
Datatec Group Chief Executive. Stephen Lawrence, the incumbent Logical CEO,
will step down from this position and from the Datatec board effective 30
September 2002.
Datatec head office activities will continue to be actively managed in London
and Johannesburg.
John McCartney, Datatec`s deputy chairman, will become non-executive chairman of
Westcon from 1 October 2002 to better distinguish the positioning of Westcon and
to provide a sharper focus in the lines of reporting.
Leslie Boyd, the non-executive chairman of Datatec, today announced the
appointment of an additional non-executive director to the Datatec board.
Nick Temple, formerly general manager and vice president of IBM Europe, Middle
East and Africa and chairman of IBM Corporation in the United Kingdom, is to
join the Datatec board as non-executive director and in addition will become non
executive chairman of Logical from 1 October 2002.
Nick Temple has had a distinguished career at IBM. Serving for 30 years in
various positions around the world, he was one of IBM`s most senior
international executives. He currently serves as a director of a number of LSE-
listed companies including Electrocomponents plc and Blick plc, the latter as
non-executive chairman.
Datatec plans to announce its interim results for the six months to end
September on 20 November 2002.
ENDS
Date: 25/09/2002 08:00:00 AM Produced by the JSE SENS Department
