Half Year 2025 Datatec Ltd Earnings Call Transcript
Key Points
- Gross profit grew by 3.5% despite a decline in revenue, indicating strong profitability.
- Adjusted EBITDA increased by 19%, showcasing effective cost management and operational efficiency.
- Underlying earnings per share jumped 56%, reflecting strong financial performance.
- Strong operating cash generation was a highlight, improving liquidity and financial stability.
- The cybersecurity segment, a significant part of Westcon's business, continued its growth trajectory, contributing to a favorable business mix.
- Reported revenues fell by over 5% due to a shift towards net accounting for software and services.
- The Latin America region, particularly Argentina, has been a drag on overall performance due to economic challenges.
- Net finance costs increased due to higher interest rates and greater utilization of facilities.
- The effective tax rate of 33% is relatively high, impacting net profitability.
- There has been a slowdown in network infrastructure purchases, affecting revenue from hardware sales.
Good morning. We are presenting today our first half fiscal year '25 results.
The format remains unchanged. I will provide a summary and then hand over to Ivan to go through the detailed consolidated financial results. I will then cover the operational review of the main divisions and conclude with a wrap up. Starting with the summary slide 4, gross profit grew while reported revenues fell, gross profit is the real measure of the dollars we bring in the door as revenue reporting under IFRS is affected by the shift from traditional hardware to recurring software and services which are increasingly net accounted. Under net accounting the reported revenue is the gross profit.
The increased gross profit and margins along with tightly controlled operating costs meant adjusted EBITDA grew considerably by 19%. All the earnings measures grew in tandem and underlying earnings per share jumped 56%. The consolidated EBITDA margin of 4% would have been higher if not for the drag from a still weak Latin America region. Both
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