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Datatec expects full year gross profit to rise about 10% to approximately $998 million after stronger demand across its international technology divisions extended the momentum built in the first half of the year, the South African-founded group said Tuesday in a trading update ahead of its May 26 results.
The company said gross profit gives a more accurate picture of underlying performance than revenue because a growing portion of its software and services business is recorded on a net basis, meaning topline comparisons can understate operational progress as the group shifts further into higher-value offerings.
The strongest divisional performance came from Westcon International, which posted gross profit growth of 13% from a year earlier. Datatec described the unit's second half as very strong. Logicalis International followed with 8% growth and what Datatec called an exceptional performance. Logicalis Latin America, the smallest contributor to the growth picture, posted a 1% increase alongside what management described as a broader improvement in financial performance compared with the prior year.
Taken together, the divisional numbers suggest Datatec is drawing on demand across multiple regions rather than relying on a single market to carry the group. Westcon's double-digit growth points to solid momentum in distribution and vendor relationships, while Logicalis International's performance reflects continued appetite among enterprise clients for higher-end IT solutions, cybersecurity and services.
The update also comes as Datatec completes its third acquisition in quick succession. Earlier in March, the group bought NetworkedAssets, a specialist in software development, network automation and observability solutions, giving it a new foothold in Poland and adding software engineering capacity to its European operations. That deal followed Logicalis USA's purchase of Maple Woods Enterprises, a long-term security partner, and an expansion into the Balkans through the acquisition of Real Security, a value-added cybersecurity distributor based in Maribor, Slovenia.
The three deals, completed within weeks of each other, signal a clear direction of travel. Datatec is moving deliberately toward cybersecurity, automation and software-led network performance, areas where enterprise spending has remained more resilient than traditional hardware distribution. That shift also mirrors the composition of the gross profit improvement, which reflects a business that is increasingly less reliant on product resale margins and more dependent on services revenue that can recur.
Chief Executive Jens Montanana has been repositioning Datatec along these lines for several years, building a technology group with genuine scale across Europe, the Americas and other international markets through organic growth and targeted bolt-on deals. The company's broad geographic footprint, primarily through Westcon and the Logicalis brands, gives it some insulation against weakness in any single region, though it also means the business carries exposure to currency movements and varying corporate technology budgets across multiple economies at once.
The broader backdrop for the update matters. Corporate technology spending has been uneven globally over the past two years as companies reassessed digital investment priorities after the post-pandemic surge. Many technology vendors have reported patchy demand. Against that environment, Datatec's guidance for approximately 10% gross profit growth and its commentary that demand remained solid through the second half represents a relatively firm statement of confidence.
Two questions are likely to dominate investor attention ahead of the May 26 results. The first is whether gross profit growth at the 10% level will translate into equivalent or stronger progress in operating earnings and cash generation, or whether cost pressures from the recent acquisition pace will absorb some of those gains. The second is how quickly the three new businesses can contribute meaningfully without creating integration drag across an already complex multinational structure.
Those are not unusual questions for an acquisitive technology company moving across multiple geographies in a compressed timeframe. What the trading update makes clear is that Datatec's management believes the demand environment justifies the pace of investment, and that the operational numbers through February back that confidence up.
