Sandy, Weak EU Sales Pressure Westcon

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Weak market conditions in Europe and continued IT upheaval in the wake of Hurricane Sandy have blown Westcon’s parent Datatec's full-year results off course.

Editor’s note: As part of our special editorial partnership, Channelnomics is publishing this recent article from CRN in the UK.

Weak market conditions in Europe and continued IT upheaval in the wake of Hurricane Sandy have blown Westcon Group Inc.’s parent Datatec Inc.'s full-year results off course.

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Datatec warned this morning that it will probably pull up short of its published 2013 forecasts due to slowing sales over the past month and a half at Westcon, its distribution arm.

Trading at its other major business, systems integrator Logicalis Inc., continues to be in line with expectations, the Johannesburg and London-listed firm added.

Spooling back to May, Datatec had hoped to post revenue of between $5.5 billion and $5.8 billionn for its year to the end of  February 2013, up from $5.03 billion in fiscal 2013. Pre-tax profit was forecast to hit $104 million.

"The board now considers it unlikely that the Group will reach its published forecasts," Datatec officials stated, adding that trading at Westcon had been both lower than expected and comparatively behind the same period last year.

Westcon has been hit by "continued weak conditions in Europe", from where it draws a third of its $1.91billion annual sales. But trading in North America – which contributes 34 percent of sales – was also affected by Hurricane Sandy and slowing federal sales.

Westcon draws a rising percentage of sales from emerging markets and on Friday bolstered its African business by acquiring networking distributor Comztek.

At last count, 14 percent of sales came from Latin America, 11 percent from Asia-Pacific and 8 percent from AIME.

For more UK channel coverage from CRN, visit www.channelweb.co.uk

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