Datatec Limited UPDATE:CAUTIONARY ANNOUNCEMENT & TRADING STATEMENT (8657B)
April 07 2017 - 2:00AM
UK Regulatory
TIDMDTC
RNS Number : 8657B
Datatec Limited
07 April 2017
7 April 2017
Datatec Limited
("Datatec" or "the Company")
UPDATE TO CAUTIONARY ANNOUNCEMENT AND TRADING STATEMENT
Datatec Limited (JSE/AIM: DTC), the international Information
and Communications Technology (ICT) Company is publishing an update
to its cautionary announcement and a trading statement for the year
ended 28 February 2017.
The update to the cautionary relates to the possible sale of a
major share of Westcon-Comstor's operations for a consideration
(current and deferred) of more than US$800 million.
The trading statement advises that underlying earnings per
share*, headline earnings per share and earnings per share are
expected to be more than 50% lower than the prior year.
Update to cautionary announcement
On 25 January 2017, the Company issued a cautionary
announcement, informing shareholders that it had entered into
negotiations around a possible transaction. The Company renewed
this cautionary announcement on 8 March 2017.
The Company is required to provide this further information
pursuant to AIM Rule 10 of the AIM Rules for Companies to provide
further context to the cautionary announcements made in January and
March 2017.
The Company can now disclose that the cautionary announcement
relates to a possible sale of a major share of Westcon-Comstor's
operations for a consideration (current and deferred) of more than
US$800 million. The proposed transaction is subject to contract and
exclusivity provisions.
There can be no certainty that the transaction will be
completed, nor as to the precise terms on which the transaction
might be completed. Shareholders are therefore advised to continue
to exercise caution when dealing in the Company's securities. The
Company undertakes to announce further details of the potential
transaction as soon as practicable.
Trading statement
In the Company's unaudited interim results announcement for the
six months ended 31 August 2016, issued on 19 October 2016,
shareholders were advised that, based on current trading and
prevailing exchange rates, underlying earnings per share* in the
second half of the financial year ended 28 February 2017 ("FY17")
was expected to be sequentially better than H1 FY17 and also
comparatively better than the second half of the previous financial
year, and the full FY17 underlying earnings per share was expected
to be better than the prior year.
In terms of the JSE Limited Listings Requirements, companies are
required to publish a trading statement as soon as they are
satisfied that a reasonable degree of certainty exists that the
financial results for the period to be reported on next will differ
by at least 20% from the most recent profit forecast or the
previous financial year.
Accordingly, shareholders are advised that underlying earnings
per share* for FY17 is expected to be more than 50% lower (or at
least 16 US cents per share lower) than the prior year (FY16: 32 US
cents). Headline earnings per share and earnings per share are also
expected to be more than 50% lower (or at least 10 US cents lower)
than the prior year (FY16: 19.4 US cents and 19.3 US cents
respectively).
Datatec is still in the process of finalising the results for
FY17 and will provide a more detailed trading statement as soon as
practicable.
The year over year expected decline in earnings is as a result
of a worse than expected result in Westcon-Comstor. There was a
decline in fourth quarter financial performance in the Europe
Middle East and Africa ("EMEA") region. Westcon-Comstor experienced
disruption to the business as a result of final stages of SAP
implementation in EMEA. Westcon-Comstor has made adjustments to the
operating model and Datatec expects this to support a rapid
recovery.
Logicalis trading was in line with management's expectation.
The forecast financial information contained in this trading
statement has not been reviewed or reported on by the Company's
auditors.
This announcement contains inside information.
*underlying earnings per share excludes impairments of goodwill
and intangible assets, profit or loss on sale of investments and
assets, amortisation of acquired intangible assets, unrealised
foreign exchange movements, acquisition-related adjustments, fair
value movements on acquisition-related financial instruments,
restructuring costs relating to fundamental reorganisations and the
taxation effect on all of the aforementioned
Enquiries:
Datatec Limited (www.datatec.co.za)
Ivan Dittrich, Chief Financial +27 (0) 11 233
Officer 3301
Jefferies International Limited - Nominated
Adviser and Broker
+44 (0) 20 7029
Nick Adams/Simon Hardy 8000
Instinctif Partners
Frederic Cornet/Pietman Roos +27 (0) 11 447
(SA) 3030
Adrian Duffield/Chantal Woolcock +44 (0) 20 7457
(UK) 2020
This information is provided by RNS
The company news service from the London Stock Exchange
END
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