Datatec has delivered a powerful trading update that points to a sharp jump in earnings for its 2026 financial year, with the JSE-listed ICT group expecting headline earnings per share (Heps) to rise by as much as 59%. The uplift comes on the back of a much stronger second half from its Westcon International and Logicalis International businesses, underlining just how forcefully the company has rebounded.
In a statement released on Thursday, the group said Heps for the year ended 28 February 2026 should land between 38.5 US cents and 40.5c, compared with 25.5c in the previous year. That would represent growth of 51% to 59%, a material improvement for a company that has spent years proving its ability to generate value across a tough global ICT market.
Earnings per share are also expected to climb, with Datatec guiding to a range of 38c to 40c, up 48% to 56% from the prior year. Its preferred non-IFRS measure, underlying earnings per share, is forecast at 47c to 49c, which works out to an increase of 32% to 37% on a recalculated FY25 base of 35.7c. For investors, that kind of spread is a clear signal that the business is firing on more than one cylinder.
The company is led by long-serving chief executive Jens Montanana, one of the best-known names in South Africa’s listed technology landscape. Datatec’s latest update suggests the group has managed to squeeze real momentum out of both its distribution and services operations, even as the broader global tech environment remains uneven and competitive.
In its earlier pre-close update released on 31 March, Datatec said Westcon, its global cybersecurity and networking distribution unit, had “continued to deliver a very strong financial performance” in the second half of the year. At the same time, Logicalis International was described as having delivered an “exceptional” performance, giving the group a particularly strong finish to the financial year.
That combination matters. Westcon sits in a sector where demand for cybersecurity and networking solutions has remained robust, while Logicalis benefits from enterprise clients looking for digital transformation support, managed services and infrastructure expertise. Put simply, Datatec appears to have benefited from businesses and governments still spending on core technology even in a cautious economic climate.
There was also a modest improvement in Logicalis Latin America, where the group said gross profit rose slightly and the financial picture continued to improve. While that business line remains more mixed than its international peers, the trend is heading in the right direction, which is important for a group with operations spanning multiple regions and market cycles.
Datatec earnings update boosts investor confidence
One of the more technical but important details in the Datatec earnings update is a change in the way the group defines underlying earnings. Datatec said share-based payment charges are now excluded from the metric, bringing the measure into line with peer reporting and its own adjusted Ebitda definition.
That may sound like accounting housekeeping, but it affects how investors compare performance year on year. The company has therefore recalculated the FY25 underlying EPS comparative on the new basis, placing the historical number at 35.7c. For analysts, that makes the new guidance easier to benchmark, even if it means the comparison has shifted slightly.
The market clearly liked what it saw. Datatec’s share price rose on Thursday after the announcement, with the stock last up 1.5% at R74.61. Over the past 12 months, the counter has gained nearly 25%, taking the group’s market value to around R17.2-billion. That is a solid run by any measure, especially in a local market where investors have been selective about tech exposure.
For SA investors watching the ICT sector, the move reinforces a familiar truth: companies with international earnings streams and exposure to cybersecurity, cloud and enterprise services continue to draw interest. Datatec’s business model, while not always simple to follow, has the benefit of geographic diversification and a strong footprint in markets that are still spending on essential digital infrastructure.
The group said it plans to publish its 2026 financial results on 26 May 2026, which should provide a fuller picture of margins, cash generation and how sustainable this earnings growth really is. That will be the moment when the market gets to test whether Thursday’s upbeat trading statement translates into a durable improvement across the balance sheet and the income statement.
For now, though, the message is straightforward: Datatec is delivering a much stronger year, with both its distribution and services businesses contributing to the uplift. As we reported earlier in this piece, the standout performances from Westcon International and Logicalis International are doing the heavy lifting, and the numbers suggest the group has regained real operating momentum. In a market that rewards consistency, that puts Datatec in a stronger position heading into its results announcement later this month.