Wrap Text
Audited Group Annual Financial Statements for the year ended 28 February 2025 - Cash Dividend with Scrip Alternative
DATATEC LIMITED
Incorporated in the Republic of South Africa
Registration number: 1994/005/004/06
Share codes: JSE: DTC
OTCQX: DTTLF
ISIN: ZAE000017745
Company tax reference number: 9999/493/71/2.
("Datatec", the "Company" or the "Group")
AUDITED GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 - CASH DIVIDEND WITH
SCRIP ALTERNATIVE
Datatec Limited, the international information and communications technology (ICT) group, today publishes
its audited group annual financial statements for the year ended 28 February 2025 ("the year" or "FY25")
on the Stock Exchange News Service ("SENS") which are available on Datatec's website
https://www.datatec.com/annual-results.php and via the JSE cloudlink:
https://senspdf.jse.co.za/documents/2025/jse/isse/dtc/FY25.pdf
Highlights
Restated^*
Results for the Results for the
year ended year ended
28 February 2025 29 February 2024 %
"FY25" "FY24" movement
Revenue^ (US$ million) 3,639.7 3,992.4 (8.8)
Gross profit (US$ million) 910.3 862.2 5.6
EBITDA (US$ million) 221.3 177.6 24.6
Underlying* earnings per share (US cents) 30.5 17.1 78.4
Earnings per share (US cents) 25.7 20.4 26.0
Headline earnings per share (US cents) 25.5 14.2 79.6
Net asset value (US$ million) 520.9 501.2 3.9
Net debt (US$ million) (52.1) (123.1) (57.7)
Dividend per ordinary share (ZAR cents) 200.0 130.0 53.8
^ The Group's FY24 revenue and cost of sales were restated following a voluntary change in accounting
policy in FY25. This change in accounting policy impacted previously reported revenue and cost of sales
only with no impact on the gross profit numbers presented (refer to the audited group annual financial
statements for the year ended 28 February 2025 for further details on this restatement).
The following non-IFRS financial measures presented in this announcement, underlying* earnings per share
and adjusted** EBITDA, are the responsibility of the Directors, and are presented for illustrative purposes
and due to their nature, may not fairly present the results, financial position and cash flows of Datatec.
Shareholders are referred to the Supplementary Pro Forma section of the Results Booklet, available on the
Company's website, for the reconciliation of the non-IFRS financial measures and the Auditor's unmodified
report thereon.
* Underlying earnings excludes impairments of goodwill and intangible assets, profit or loss on sale of
investments and assets, amortisation of acquired intangible assets, acquisition-related adjustments, fair
value movements on acquisition-related financial instruments, restructuring costs relating to fundamental
reorganisations, one-off tax items impacting EBITDA, costs relating to acquisitions, integration and
corporate actions, and the taxation effect of all of the aforementioned.
Following a review of peer reporting and to more closely align the definition of underlying* earnings to
the Group's Adjusted** EBITDA metric, the Group decided not to exclude unrealised foreign exchange gains
or losses from underlying* earnings from FY25 onward. The comparative figure for underlying* earnings
per share (which is a non-IFRS measure) for FY24 has been recalculated in accordance with the revised
definition. The Board will continue to monitor and assess peer reporting and best practices in this regard.
**Adjusted EBITDA refers to EBITDA excluding restructuring costs, share-based payments, one-off tax items
impacting EBITDA and acquisition, integration and corporate actions costs.
- Continued strong margin and profit growth in Westcon International
- AI driving generational change in infrastructure
- Exceptional performance from Logicalis International with improved profitability in all regions
- Modernisation of IT infrastructure to support hybrid-cloud driving managed services
- Improving performance in Logicalis Latin America
- Vendors increasingly relying on channels and experienced partners
JENS MONTANANA, CHIEF EXECUTIVE OF DATATEC, COMMENTED:
"I am pleased to report a very strong operating and financial performance across all regions and metrics for
the Group.
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.
Increasing IT complexity driven by AI 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."
Strategic overview
Datatec's strategy is to improve shareholder returns over the medium term through a combination of corporate
and business development actions aimed to enhance the competitiveness and profitability of its subsidiaries and
operating divisions.
The Group continues to see good demand for its technology solutions and services worldwide with subsidiaries
well-positioned to service customers in their respective markets.
The Group's Strategic Review continues to address the persistent gap between Datatec's valuation and the inherent
value of its subsidiaries while also ensuring that the Group is positioned to take full advantage of the positive
market dynamics for its technology solutions and services.
As part of its initiatives, Datatec broadened its investor relations programme during FY25 and was admitted to the
OTCQX trading platform in the US to increase international investor access.
Datatec also announced a share repurchase programme that commenced on 28 November 2024 in accordance with the
authority received at its last Annual General Meeting. The shares that have been repurchased shall be cancelled as
issued shares in due course and will revert to authorised but unissued share capital status.
Group results
Revenue^ decreased by 8.8%. The decrease in revenue is mainly attributable to a mix change and more software and
services being net revenue accounted. Gross profit increase by 5.6% to US$910.3 million (FY24 US$862.2 million).
The increase in gross margin^ % is largely due to changes in the revenue mix, contributing to a significant gross
profit increase in Westcon International and Logicalis International. Adjusted** EBITDA increased by 28.2% to
US$246.2 million (FY24: US$192.1 million).
Divisional summary
Westcon International
Revenue^ decreased by 11.3% to US$2.0 billion (FY24: US$2.2 billion^) due to changes in revenue mix and a greater
percentage of revenue being accounted for on a net revenue basis.
Gross profit increased by 9.4% to US$441.2 million (FY24: US$403.4 million), with growth in all regions and a
significant increase in Asia-Pacific. Adjusted** EBITDA increased by 24.7% to US$149.9 million
(FY24: US$120.2 million), as improved operating efficiencies resulted in operating expenses increasing at a lower
rate than gross profit growth.
Logicalis International
Revenue decreased by 5.9% to US$1.2 billion (FY24: US$1.3 billion) due to a mix change with more net revenue
accounted software and services. Strong gross margin % improvement due to higher product margins achieved and a
strong professional services margin. Adjusted** EBITDA increased to US$94.0 million (FY24: US$74.1 million) as a
result of restructuring activities undertaken in previous years, increased organic growth and more higher product
margin transactions.
Logicalis Latin America
Revenue decreased by 11.3% to US$455.1 million (FY24: US$512.9 million). This is driven by reduced volume in Brazil
and a lower opening backlog. The reduced gross profit of US$103.6 million (FY24:US$117.9 million) and gross margin
% of 22.8% (FY24: 23.0%) are a result of the decrease in revenue mainly from Brazil. Adjusted** EBITDA significantly
improved to US$20.1 million (FY24: US$12.6 million). This increase of 59.5% is attributed to good operating cost
management and effective mitigation of the foreign exchange impact.
Current trading and outlook
We expect that the trend toward higher software sales and annuity services will continue, improving the Group's
margins and cash flow profile. There is continued strong demand for the Group's products and solutions, which
positions the Group well in an increasingly complex environment.
The Board expects that all divisions will continue to improve their financial performance in the year ahead.
The Group will remain focused on unlocking shareholder value in the context of its Strategic Review.
Dividend policy
The implementation of the new management incentive plans in some of the divisions has resulted in upstreaming
of cash to the parent company in the form of returns on fixed return equity instruments (loan notes). 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 three-times cover).
Dividend
Notice is hereby given that the Board has declared a final distribution for the year ended 28 February 2025, by
way of a cash dividend of 200 ZAR cents per Datatec ordinary share ("Cash Dividend") payable to the ordinary
shareholders (the "Shareholders"), which will be in proportion to a Shareholder's ordinary shareholding in Datatec
at the close of business on the Record Date, being Friday, 18 July 2025.
Shareholders will be entitled, in respect of all or part of their shareholding, to elect to receive new, fully
paid ordinary Datatec shares ("Shares") in proportion to their ordinary shareholding on the Record Date as an
alternative to the cash dividend (the "Scrip Distribution"). The Cash Dividend has been declared and paid out
of Datatec's distributable retained profits. A dividend withholding tax of 20% will be applicable in respect of
the Cash Dividend to all Shareholders not exempt therefrom after deduction of which, the net Cash Dividend is
160 ZAR cents per share.
The new Shares issued pursuant to the Scrip Distribution, will not be subject to a dividend withholding tax, and
the issue price of the Scrip Distribution (which will equal the volume weighted average price ("VWAP") of Datatec's
Shares traded on the JSE for the 30-day trading day period ending on Monday, 7 July 2025 less the amount of the
Cash Dividend), will be settled by way of a capitalisation of Datatec's distributable retained profits.
The Company's total number of Shares as at Tuesday, 27 May 2025 is 236 184 688. Datatec's income tax reference
number is 9999/493/71/2.
A circular providing Shareholders with full information on the Cash Dividend or Scrip Distribution alternative,
including a Form of Election to elect to receive the Scrip Distribution alternative will be distributed to
Shareholders on or about Wednesday, 4 June 2025 ("the Circular"). The salient dates of events thereafter are
as follows:
Event 2025
Record date for Shareholders to be registered in the Company's securities
register in order to be entitled to receive the Circular Friday, 30 May
Distribution of Circular announced on SENS on Wednesday, 4 June
Circular and Form of Election (grey) distributed on Wednesday, 4 June
Finalisation announcement released on SENS in respect of the ratio
applicable to the Scrip Distribution alternative, based on the 30-day VWAP
"ex" the Cash Dividend ending on Monday, 7 July 2025, by 11h00 on Tuesday, 8 July
Last day to trade in order to be eligible for the Cash Dividend and the
Scrip Distribution alternative Tuesday, 15 July
Shares trade "ex" the Cash Dividend and the Scrip Distribution alternative on Wednesday, 16 July
Listing and trading of maximum possible number of Shares on the JSE in terms
of the Scrip Distribution alternative from the commencement of trading on Wednesday, 16 July
Announcement released on SENS in respect of the cash payment applicable to
fractional entitlements, based on the VWAP of a Share traded on the JSE on
Wednesday, 16 July 2025, discounted by 10%, by 11h00 on Thursday, 17 July
Last day to elect to receive the Scrip Distribution alternative instead of
the Cash Dividend, Forms of Election (grey) to reach Computershare Investor
Services Proprietary Limited, the transfer secretaries of the Company by
12h00 on Friday, 18 July
Record date in respect of the Cash Dividend and the Scrip Distribution
alternative Friday, 18 July
Cash Dividend payments made, and CSDP/broker accounts credited/updated
with Scrip Distribution shares on Monday, 21 July
Announcement relating to the results of the Cash Dividend and the Scrip
Distribution alternative released on SENS on Monday, 21 July
JSE listing of Shares in respect of the Scrip Distribution alternative
adjusted to reflect the actual number of Shares issued in terms of the
Scrip Distribution alternative at the commencement of trading on or about Tuesday, 22 July
All times provided are South African local times. The above dates and times are subject to change. Any
material change will be announced on SENS.
Share certificates may not be dematerialised or rematerialised between Wednesday, 16 July 2025 and
Friday, 18 July 2025, both days inclusive. If Datatec maintains a certificated register, then the register
will be closed from Wednesday, 16 July 2025 and Friday, 18 July 2025, both days inclusive.
Application to the Financial Surveillance Department of the South African Reserve Bank for the payment of
the Cash Dividend and the Scrip Distribution alternative has been made and an announcement regarding the
approval made on SENS.
Foreign Shareholders
The rights to receive the Scrip Distribution in jurisdictions other than the Republic of South Africa,
may be restricted by law and any failure to comply with these restrictions may constitute a violation of the
securities laws of such jurisdictions. Accordingly, Shareholders will not be entitled to receive the Scrip
Distribution, directly or indirectly, in those jurisdictions and shall be deemed to have elected the Cash Dividend
alternative. Such non-resident Shareholders should inform themselves about and observe any applicable legal
requirements in such jurisdictions. It is the responsibility of non-resident Shareholders to satisfy themselves
as to the full observance of the laws and regulatory requirements of the relevant jurisdictions in respect of the
Scrip Distribution, including the obtaining of any governmental, exchange control or other consents or the making
of any filing which may be required, compliance with other necessary formalities and payment of any issue, transfer
or other taxes or other requisite payments due in such jurisdictions. Shareholders who have any doubts as to their
position, including, without limitation, their tax status, should consult an appropriate adviser in the relevant
jurisdictions without delay.
Board changes (All previously announced)
The following changes to the Board and Board Committees have taken place during FY25 as previously announced on SENS:
- Mr CR Jones joined the Board as an independent non-executive director and member of the Audit, Risk, and Compliance
Committee ("ARCC") on 3 June 2024.
- Mr SJ Davidson retired from the Board on 31 July 2024.
- Mr CRK Medlock retired from the Board on 31 July 2024.
- Ms SJ Everaet stood down from the ARCC on 3 June 2024 and took over as Chair of the Social and Ethics Committee
on 31 July 2024.
Other information
This announcement may contain statements regarding the future financial performance of the Group which may be
considered to be forward looking statements. By their nature, forward looking statements involve risk and
uncertainty, and although the Group has taken reasonable care to ensure the accuracy of the information presented,
no assurance can be given that such expectations will prove to have been correct.
The Group has attempted to identify important factors that could cause actual actions, events or results to differ
materially from those described in forward looking statements and there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. It is important to note, that:
i. unless otherwise indicated, forward looking statements indicate the Group's expectations and have not been
reviewed or reported on by the Group's external auditors;
ii. actual results may differ materially from the Group's expectations if known and unknown risks or uncertainties
affect its business, or if estimates or assumptions prove inaccurate;
iii. the Group cannot guarantee that any forward looking statement will materialise and, accordingly, readers are
cautioned not to place undue reliance on these forward looking statements; and
iv. the Group disclaims any intention and assumes no obligation to update or revise any forward looking statement
even if new information becomes available, as a result of future events or for any other reason, other than as
required by the JSE Listing Requirements.
This short-form announcement is the responsibility of the Board of Directors of the Company. Shareholders are
advised that this short-form announcement represents a summary of the information contained in the Group's audited
financial statements, published on SENS and on Datatec's website on 27 May 2025 via the links provided in this
announcement, and does not contain full or complete details. The announcement itself is not audited.
Any investment decisions by investors and/or shareholders should be based on consideration of the Group's audited
annual financial statements for the year ended 28 February 2025, as a whole.
PricewaterhouseCoopers Inc., the Group's auditors, have audited the consolidated and separate annual financial
statements from which this announcement has been derived and have expressed an unmodified audit opinion on these
financial statements. The full audit opinion, with Key Audit Matters, issued on the consolidated and separate
annual financial statements and the accompanying financial statements can be accessed on Datatec's website
https://www.datatec.com/annual-results.php
Results presentation
Shareholders are reminded that Datatec will be hosting a virtual presentation at 09:00 am SAST on
Tuesday, 27 May 2025 to present the results to investors.
Presentation details:
View and listen mode: https://www.corpcam.com/Datatec27052025. The presentation slides and results booklet will be
available prior to the presentation on Datatec's website at https://www.datatec.com/annual-results.php.
On behalf of the Board
M Makanjee JP Montanana IP Dittrich
Chair Chief Executive Officer Chief Financial Officer
27 May 2025
Directors
M Makanjee (Chair)+, # JP Montanana (CEO), * IP Dittrich (CFO), # CR Jones+, = SJ Everaet+, MJN Njeke+,
^ LC Rapparini+, DS Sita+
# British
* American
= Belgian
^ Brazilian
+ Non-executive
Registered office
15th Floor, The Leonardo, 75 Maude Street, Sandown, Sandton 2146
Sponsor
Pallidus Exchange Services Proprietary Limited
Transfer secretaries
Computershare Investor Services Proprietary Limited
Independent auditors
PricewaterhouseCoopers Inc.
Date: 27-05-2025 08:00:00
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