Technology group Datatec says current market conditions forbid the group from listing its subsidiary Logicalis in Latin America.
The JSE-listed group, which today released its half-year results ending August, says while the potential listing of Logicalis’s Latin American business on the Brazilian Stock Exchange remains of high interest, “current market conditions make the timing of any potential listing undeterminable”.
Logicalis is Datatec’s largest contributor in terms of profitability and has the widest geographical exposure. The technology group says it intends to continue to develop and grow Logicalis globally, both organically and through acquisitions.
The company has already gone shopping. In September last year, Logicalis purchased a 70% interest in Cilnet, a Cisco systems integrator and managed services business in Portugal.
In addition, Logicalis Germany acquired Orange Networks, a Microsoft services business focused on Microsoft cloud and managed services.
In July 2019, it acquired Mars Technologies, an IT services business, with offices in Cape Town, Johannesburg, Port Elizabeth, Durban and East London, employing 76 staff.
In the current reporting period, Logicalis’s revenue fell 10% to R11.4 billion ($700.2 million), largely due to unfavourable currency effects in Latin America. Keeping out the currency effects, revenue for Logicalis was 1.9% lower.
Commenting on the overall group performance for the period under review, Jens Montanana, chief executive of Datatec, says the company showed great resilience during a period of unprecedented COVID-19-related disruptions.
“Our divisions provide many of the products and services required to support a remote IT network-based way of doing business, an increasing trend that we see continuing well beyond the current pandemic.
"Whilst the path of COVID-19 remains uncertain, Datatec is well-positioned to support its customers' requirements and we anticipate the positive momentum experienced during the first half to continue throughout 2020 and into 2021.”
In the six months ending August, Datatec’s group revenues were down 1% to R33 billion, while earnings before interest, taxation, depreciation and amortisation was down 13% to R977 million.
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