Datatec (DTC) H2 2025 earnings summary

Executive summary

• Gross invoiced income rose by $114 million (1.5%) to $7.74 billion, with adjusted EBITDA up 28.2% to $246.2 million and underlying EPS up 78.4% to 30.5 US¢, driven by operational leverage and increased demand for AI and data center infrastructure.

• Final dividend increased to 11 US¢ per share, with payout policy raised to 50% of UEPS, resulting in a 114% increase in total dividend paid.

• The business benefited from a shift to more software, services, and recurring revenue, with expanding margins and improved cash generation.

• Strong operational leverage and margin growth, especially in Westcon and Logicalis International.

• Improved quality of earnings and significant increases in all earnings metrics.

Financial highlights

• Gross profit increased by 5.6% to $910.3 million, with adjusted EBITDA margin improving to 6.8% from 4.8%.

• Operating profit rose 36.8% to $159.2 million; profit before tax up 35.9% to $104.0 million.

• Net finance costs rose due to higher interest rates and greater facility utilization.

• Net debt reduced to $52.1 million from $123.1 million, with net cash (excluding leases) at $30.5 million.

• Net cash inflow from operating activities doubled to $189.7 million.

Outlook and guidance

• Expecting low single-digit top-line growth across all divisions, with gross profit and margins growing faster due to the ongoing shift to software and services.

• AI adoption and hybrid cloud infrastructure are expected to drive sustained demand for IT and cybersecurity solutions.

• Positive trends in Latin America and continued focus on operational efficiency and digital transformation.

• Lower interest rates and easing supply chains anticipated.

• Westcon positioned strongly in cyber and networking; Logicalis to benefit from digital and hybrid infrastructure trends.