South African IT group Datatec on Wednesday reported underlying earnings per share of 47.3 US cents for the year ended February 2008, up 21 percent from 39.2 cents a year ago.

Underlying HEPS excludes goodwill impairment, amortisation of intangible fixed assets, profit or loss on sale of assets and businesses and unrealised foreign exchange movements on inter-company loans.

A distribution of US 12 cents per share was declared, compared with 10 cents a year ago.

Revenue was 27 percent higher at US$4.008-billion, while operating profit was 25 percent higher at $123.6-million.

Gross profit increased by 32 percent to $547.1-million, while operating costs increased 34 percent to $396.3-million, mainly as a result of the European businesses acquired, which operate at higher margins with higher operating costs.

Jens Montanana, Chief Executive of Datatec, commented: "2008 was another year of strong performance for the Group with further improvements in revenues and earnings. We continue to benefit from our scale and geographic diversity.

"As a result of strong organic growth and acquisitions we exceeded our revenue target of $4-billion. Despite a slowdown in the US, tight operating cost controls and improving productivity have underpinned our solid progress which has resulted in improvements in margins," he said.

The Group's operations in Asia-Pacific, Africa and the Middle East and South America continue to grow and now account for 15 percent of the group's revenues from 14 percent last year.

Performance over the prior year improved in each of the group's three main business divisions.

Westcon accounted for 71 percent of the group's revenues and 68 percent of EBITDA, while Logicalis accounted for 21 percent of the group's revenues and 24 percent of EBITDA. Analysys Mason accounted for two percent of the group's revenues and five percent of EBITDA.

Looking ahead, during the coming year the group will continue to benefit from its improving business mix and geographic diversity across its principal operating divisions, it said.

The increased exposure to high growth emerging markets and developing economies should help balance any slowdown in the more mature markets of the US and Western Europe.

Datatec believes its business model will remain resilient and continue to deliver growth as the shift in global IT purchasing power, as a result of the weakening dollar, has helped underpin global IT demand, even as other areas of the global economy show signs of weakness.

In the year to 28 February 2009, the Group is expected to grow revenues in excess of 20 percent, including acquisitions.

"The current year has started well and in line with our expectations. We remain confident that our increasing international reach and business mix, together with operating leverage brought through scale, will enable us to continue to grow the Group organically above industry averages, even in more difficult market conditions. We are also continuing to expand our business by acquisition in faster developing markets," Montanana concluded.

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