South Africa's Datatec posts one of its best years ever as AI drives record demand for cybersecurity and IT infrastructure

Jens Montanana has been running Datatec for more than 30 years. He described what just happened as one of the strongest in the group's history.

The South African-founded technology distribution and services group posted full-year results for the year ended February 28, 2026, on Tuesday, reporting gross invoiced income up 9.3 percent to $8.5 billion, or R139 billion, and gross profit up 9.6 percent to $997.8 million. Headline earnings per share surged 56.5 percent to 39.9 US cents. Profit after tax rose to $108.7 million from $69.3 million. The group's total dividend climbed 55 percent to 24 US cents per share, or R3.92, with a final cash dividend of R2.25 per share declared on Tuesday.

The engine behind the numbers was AI. Not Datatec's own AI development, but the AI infrastructure buildout happening inside thousands of corporate and institutional clients globally. Montanana's thesis, which he has been articulating for several years, is that AI adoption increases IT complexity, and IT complexity drives demand for the kind of deep domain expertise and specialist infrastructure services that Datatec delivers through Westcon and Logicalis. The FY2026 results are the clearest validation yet that the thesis is correct.

Westcon International, Datatec's global technology distribution arm, delivered the standout performance. Gross invoiced income rose 9.6 percent to $5.74 billion. Adjusted EBITDA climbed 15 percent to $172.4 million. Cybersecurity, now accounting for 52 percent of Westcon's category sales, continues to outpace broader IT spending. Recurring sales contribute 68 percent of Westcon's total revenue, a figure that gives the business significant earnings visibility and reduces its dependence on lumpy hardware cycle timing.

Logicalis International contributed what Datatec described as an exceptional performance, generating strong operating leverage across its managed services and IT infrastructure delivery operations across Europe, Asia-Pacific and other markets. Logicalis Latin America posted a 1 percent gross profit increase alongside an improvement in overall financial performance compared with the prior year.

Return on invested capital improved by 510 basis points to 21.6 percent, reflecting the cumulative impact of Montanana's multi-year push toward software and services as a proportion of the revenue mix. Over 70 percent of Datatec's sales are now derived from software and services rather than hardware, a transformation that has directly contributed to the margin expansion visible in the FY2026 results.

Montanana himself is Datatec's largest individual shareholder, with an 18.33 percent stake valued at approximately R2.5 billion as of August 2025. His continued personal accumulation of shares, at each stage buying ahead of results he expected to be strong, has been one of the cleaner insider confidence signals on the JSE over the past two years. The 55 percent dividend increase declared on Tuesday rewards the shareholders who read the same signal.

Datatec is listed on the JSE but generates 98 percent of its revenue outside South Africa. It has consistently maintained its Johannesburg listing because the majority of its shareholder base is South African, even as the operational centre of gravity has long been its international divisions. Montanana has previously noted that a Nasdaq listing would make Datatec effectively invisible in a market of that scale.

The FY2027 outlook continues in the same direction. The company said AI-ready IT and network infrastructure will become essential for most businesses, and that Datatec is well-positioned to capture the resulting demand across all its operating divisions.