7. Summarised segmental analysis for the year ended 28 February 2023
For management's internal purposes, the Group is currently organised into four operating divisions which are the basis on which the Group reports its primary segmental information. Principal activities are as follows:
- Westcon International: Value-added technology distributor of industry-leading solutions. Provides class-leading cyber security, network infrastructure, unified collaboration products, data centre solutions, channel support services and financing/leasing solutions for ICT customers;
- Logicalis International and Logicalis Latin America: International solutions providers of digital services; and
- Corporate and Management Consulting: Management Consulting provides strategic, trusted advisory, modelling and market intelligence services to the TMT industries. Analysys Mason was disposed of during the year and its results are disclosed as discontinued operations. Corporate includes Group head office companies, including the ultimate Logicalis holding company, Logicalis Group Limited and its associated costs, and Group consolidation adjustments.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive directors that make strategic decisions.
The segmental report has been updated in the current and prior year to reflect significant expenses identified in EBITDA. The regional analysis of EBITDA is no longer presented. Following the change to management reporting segments, EBITDA is now only reviewed per operating division by the chief operating decision maker.
During FY23 and FY22, there were no customers that individually accounted for over 10% of the Group's revenue. There is one customer in Logicalis Latin America which accounts for over 10% of Logicalis Latin America's revenue (US$180.7 million).
Sales and purchases between Group companies are concluded on normal commercial terms in the ordinary course of business. The inter-group sales of goods and provision of services for the period ended 28 February 2023 amounted to US$71.1 million (FY22: US$53.4 million). During the year, the Group made sales totalling US$74.9 million (FY22: US$49.0 million) and received management fees of US$0.3 million (FY22: US$0.3 million) from its associate Esource Resources, LLC, which was disposed of during the current year. No amounts due to or from this entity are disclosed as it no longer meets the definition of a related party at 28 February 2023.
Westcon International |
Logicalis International |
Logicalis Latin America |
||||||||
| US$'000 | Audited Year ended 28 February 2023 |
Audited Year ended 28 February 2022 |
Audited Year ended 28 February 2023 |
Audited Re-presented# Year ended 28 February 2022 |
Audited Year ended 28 February 2023 |
Audited Re-presented# Year ended 28 February 2022 |
||||
| Revenue | 3 420 569 | 2 890 439 | 1 231 517 | 1 133 265 | 491 039 | 522 694 | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue from product sales | 3 338 944 | 2 810 644 | 755 236 | 667 917 | 275 417 | 340 977 | ||||
| Revenue from sales of hardware | 2 018 852 | 1 679 219 | 569 783 | 479 743 | 186 814 | 245 063 | ||||
| Revenue from sales of software* | 1 318 914 | 1 115 401 | 186 301 | 188 266 | 88 970 | 95 914 | ||||
| Revenue from vendor resold services and product maintenance sales | 70 417 | 68 554 | – | – | – | – | ||||
| Inter-segmental revenue | (69 239) | (52 530) | (848) | (92) | (367) | – | ||||
| Revenue from services | 69 986 | 69 527 | 194 292 | 179 861 | 61 506 | 50 245 | ||||
| Revenue from professional services | 70 555 | 70 258 | 194 292 | 179 861 | 61 506 | 50 245 | ||||
| Inter-segmental revenue | (569) | (731) | – | – | – | – | ||||
| Revenue from annuity services | 11 639 | 10 268 | 281 989 | 285 487 | 154 116 | 131 472 | ||||
| Revenue from cloud services | – | – | 108 954 | 46 593 | 1 400 | 995 | ||||
| Revenue from software services* | 11 760 | 10 310 | – | – | – | – | ||||
| Revenue from other annuity services | – | – | 173 035 | 238 894 | 152 716 | 130 477 | ||||
| Inter-segmental revenue | (121) | (42) | – | – | – | – | ||||
| Significant expenses included in EBITDA: | ||||||||||
| Staff costs | (199 892) | (199 367) | (199 625) | (192 418) | (55 170) | (51 319) | ||||
| Share-based payments | (36 284) | (10 523) | (463) | (899) | (504) | 645 | ||||
| Restructuring costs | – | – | (12 504) | – | (2 189) | – | ||||
| EBITDA | 48 459 | 68 071 | 50 466 | 64 048 | 21 156 | 28 486 | ||||
| Reconciliation of operating profit/(loss) to profit/(loss) for the year | ||||||||||
| Operating profit/(loss) | 21 741 | 43 562 | 6 595 | 27 862 | 13 802 | 21 016 | ||||
| Interest income | 1 117 | 546 | 1 329 | 441 | 2 454 | 635 | ||||
| Finance costs | (20 341) | (11 825) | (13 197) | (7 861) | (12 935) | (13 525) | ||||
| Share of equity-accounted investment earnings/(losses) | – | – | 409 | 452 | (645) | (1 613) | ||||
| Acquisition-related fair value adjustments | – | – | 38 | 567 | – | – | ||||
| Other income/(expenses) | 21 | (27) | – | – | – | – | ||||
| Loss on disposal of investment | – | – | (1 392) | – | – | – | ||||
| Profit/(loss) before taxation | 2 538 | 32 256 | (6 218) | 21 461 | 2 676 | 6 513 | ||||
| Taxation | (6 271) | (1 413) | (1 264) | (6 659) | (1 391) | (1 748) | ||||
| (Loss)/profit for the year from continuing operations | (3 733) | 30 843 | (7 482) | 14 802 | 1 285 | 4 765 | ||||
| Profit for the year from discontinued operations | – | – | – | – | – | – | ||||
| (Loss)/profit for the year | (3 733) | 30 843 | (7 482) | 14 802 | 1 285 | 4 765 | ||||
| Assets and liabilities | ||||||||||
| Total assets | 1 935 153 | 1 443 308 | 1 087 569 | 976 807 | 507 688 | 390 930 | ||||
| Total liabilities | 1 845 555 | 1 325 785 | 865 704 | 745 551 | 354 665 | 241 162 | ||||
Corporate and |
Datatec Group Total |
|||||
| US$'000 | |
Audited Year ended 28 February 2023 |
Audited Re-presented^# Year ended 28 February 2022 |
|
Audited Year ended 28 February 2023 |
Audited Re-presented^ Year ended 28 February 2022 |
| Revenue | – | – | 5 143 125 | 4 546 398 | ||
|---|---|---|---|---|---|---|
| Revenue from product sales | – | – | 4 369 597 | 3 819 538 | ||
| Revenue from sales of hardware | (47 144) | (40 970) | 2 728 305 | 2 363 055 | ||
| Revenue from sales of software* | (23 175) | (11 393) | 1 571 010 | 1 388 188 | ||
| Revenue from vendor resold services and product maintenance sales | (135) | (259) | 70 282 | 68 295 | ||
| Inter-segmental revenue | 70 454 | 52 622 | – | – | ||
| Revenue from services | – | – | 325 784 | 299 633 | ||
| Revenue from professional services | (569) | (731) | 325 784 | 299 633 | ||
| Inter-segmental revenue | 569 | 731 | – | – | ||
| Revenue from annuity services | – | – | 447 744 | 427 227 | ||
| Revenue from cloud services | – | – | 110 354 | 47 588 | ||
| Revenue from software services* | (121) | (42) | 11 639 | 10 268 | ||
| Revenue from other annuity services | – | – | 325 751 | 369 371 | ||
| Inter-segmental revenue | 121 | 42 | – | – | ||
| Significant expenses included in EBITDA: | ||||||
| Staff costs | (2 690) | (2 595) | (457 377) | (445 699) | ||
| Share-based payments | (15 390) | (4 688) | (52 641) | (15 465) | ||
| Restructuring costs | (464) | – | (15 157) | – | ||
| EBITDA | (21 835) | (17 148) | 98 246 | 143 457 | ||
| Reconciliation of operating profit/(loss) to profit/(loss) for the year | ||||||
| Operating profit/(loss) | (23 646) | (17 465) | 18 492 | 74 975 | ||
| Interest income | 3 584 | 642 | 8 484 | 2 264 | ||
| Finance costs | (101) | (104) | (46 574) | (33 315) | ||
| Share of equity-accounted investment earnings/(losses) | 1 118 | 734 | 882 | (427) | ||
| Acquisition-related fair value adjustments | – | – | 38 | 567 | ||
| Other income/(expenses) | – | – | 21 | (27) | ||
| Loss on disposal of investment | – | – | (1 392) | – | ||
| Profit/(loss) before taxation | (19 045) | (16 193) | (20 049) | 44 037 | ||
| Taxation | (4 449) | 350 | (13 375) | (9 470) | ||
| (Loss)/profit for the year from continuing operations | (23 494) | (15 843) | (33 424) | 34 567 | ||
| Profit for the year from discontinued operations | 116 967 | 5 766 | 116 967 | 5 766 | ||
| (Loss)/profit for the year | 93 473 | (10 077) | 83 543 | 40 333 | ||
| Assets and liabilities | ||||||
| Total assets | 95 855 | 201 188 | 3 626 265 | 3 012 233 | ||
| Total liabilities | 28 001 | 68 789 | 3 093 925 | 2 381 287 | ||
| * | Includes software as a service revenues. |
| ^ | The prior year has been re-presented to show comparative results from discontinued operations in accordance with IFRS 5. |
| # | The Logicalis segment previously reported in the prior period is now being reported as two management segments, Logicalis Latin America and Logicalis International (representing the Logicalis business outside of Latin America) to understand the factors affecting the underlying performance of the respective businesses and to align with the Group's strategic objectives. The ultimate Logicalis holding company, Logicalis Group Limited, and its associated costs, is now included in the "Corporate and Management Consulting" segment. Comparative results have been re-presented. |