Datatec (DTC) H1 2026 earnings summary

Executive summary

• Exceptionally strong first half with all divisions delivering year-over-year profit, margin, and working capital improvements, driven by increased software and services mix and robust demand for digital infrastructure and cybersecurity.

• Gross invoiced income rose 9.4% to $4.1bn, gross profit up 11.7% to $483.4m, adjusted EBITDA up 21.9% to $129.2m, and underlying EPS up 43% to 19.3 US cents.

• Interim dividend per share increased by 133% to 10 US cents (175 ZAR cents), reflecting enhanced payout ratio and profit growth.

• Margin expansion and operating leverage drove profit growth, especially in Westcon and Logicalis International.

• AI adoption and IT complexity are accelerating, supporting robust trading conditions.

Financial highlights

• Gross profit up 11.7% to $483.4m; gross margin improved to 26.3% from 24.2%.

• Adjusted EBITDA increased 21.9% to $129.2m; reported EBITDA up 36% including $15M in settled tax litigation credits.

• Profit before tax surged 91.6% to $86.4m; underlying EPS up 43% to 19.3 US¢; headline EPS more than doubled.

• Net debt reduced to $54.4m from $108.4m year-over-year, with strong cash generation and improved liquidity.

• Interim dividend declared at 10 US¢ per share.

Outlook and guidance

• Full-year financial performance expected to improve across all divisions, with continued shift to higher-margin recurring revenues and typically stronger second half.

• AI-driven technology upgrades and infrastructure rebuilds are expanding beyond hyperscalers to enterprises.

• Strategic review to unlock shareholder value remains a priority.

• Continued focus on maximizing shareholder value and adapting to technology trends.

• AI-ready IT and network infrastructure seen as essential for future growth.