Datatec`s Friday announcement that it would not meet analysts` forecasts was not intended as a profit warning, but rather as a response to Thursday`s unusual activity when the share price fell by 32% to R68,50 in trading worth more than R360 million.
"Datatec`s policy is that it does not issue profit forecasts and Friday`s statement was in response to an analyst`s comments that has materially affected the share price," Datatec`s director of marketing and strategy Jonathan Newman told ITWeb on Saturday.
Chris Veegh, the IT analyst at stockbrokers Deutsche Bank Securities, on Thursday evening told an SABC radio show that he had asked Datatec`s management that morning if they would make the 400 cents profit forecast in their fourth quarter. He interpreted their response as a negative.
Newman says the forecast related to the Inet-Bridge consensus forecast and was not issued by the company itself.
"We are still busy reconciling our numbers for release on 18 May and so we are not sure what it will be. The statement issued by us was as a result of Thursday`s movements and we did not intend to release any type of profit warning at all. Furthermore, if we were to release a profit warning, in no way would our chairman and CEO Jens Montana go to Brazil," Newman says.
He says management`s conversation with Veegh had possibly left the wrong impression and this had caused the share price to spiral out of control.
"There is a big difference to meeting analysts` expectations and being profitable and we are still profitable and we have no intention of putting out a profit warning," Newman says.
According to Datatec`s Friday announcement profits for the group were expected to be below analysts` consensus forecasts for the year ended 31 March. However, all major divisions are trading profitably.
The main hiccup was with Datatec`s US subsidiary Westcon which was experiencing reduced demand for its Lucent and Nortel product lines as a consequence of the announced reorganisation of Lucent and transitioning product lines within Nortel.
"Westcon has addressed this issue by realigning the costs and operations of relevant business units," the statement says.
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