Shares in IT group Datatec slide on surprise earnings warning
IT GROUP Datatec yesterday issued a shock profit warning, owing to a worse than expected performance in its biggest division.
The company said that its technology business Westcon had been hit by “weak conditions in Europe, disruption in North America due to Hurricane Sandy and lower than expected [US] Federal business,” in its third quarter.
It said that sales at Westcon had been worse than expected and “comparatively lower than in the same period last year”.
Datatec, which is listed in London and Johannesburg, fell by more than four per cent on the news yesterday.
Westcon provides IT and networking technologies in over 100 countries and accounts for around three-quarters of Datatec’s revenues. Its communications and security systems have more than 20,000 customers.
Datatec said it is now unlikely that it will reach its forecasts for the year, although it did say that its integration business Logicalis was trading in line with expectations.
It had originally expected annual sales of up to $5.8bn (£3.6bn) and pre-tax profits of around £104m.
The group will make clear the shortfall at its next interim management statement in January.