Our operating environment

The Group achieved a very strong operating and financial performance across all regions and metrics.

The improving profitability and cash generation of the Group's divisions enabled Datatec to increase its dividend payout policy to 50% of underlying earnings per share.

Increasing information technology ("IT") complexity driven by AI and the significant rise in interconnected digital communities is driving infrastructure demand in areas like networking and cyber security where we have deep domain knowledge and many years of experience. The Group's subsidiaries are well-positioned to service customers in their respective markets.

The Group's Strategic Review continues to address the persistent gap between Datatec's valuation and the inherent value of its subsidiaries while also ensuring that the Group is positioned to take full advantage of the positive market dynamics for its technology solutions and services.

As part of its initiatives, Datatec broadened its investor relations programme during FY25 and was admitted to the OTCQX trading platform in the US to increase international investor access. Datatec also announced a share repurchase programme that commenced on 28 November 2024 in accordance with the authority received at its last AGM. The shares that have been repurchased will be cancelled as issued shares in due course and will revert to authorised but unissued share capital status.

We expect that the trend toward higher software sales and annuity services will continue, improving the Group's margins and cash flow profile. There is continued strong demand for the Group's products and solutions, which positions the Group well in an increasingly complex environment.

The Board expects that all divisions will continue to improve their financial performance in the year ahead. The Group will remain focused on unlocking shareholder value in the context of its Strategic Review.

Fluctuating exchange rates

Exchange rate volatility has a big impact on Datatec, especially in emerging markets. We are exposed to the effects of negative currency fluctuations in Latin America and South Africa in particular. Exchange rate fluctuations affect all our divisions. Logicalis Latin America was significantly impacted by the sharp currency depreciation in Argentina in the prior year, but more stability in Argentina over the current year has resulted in reduced foreign exchange losses.

Global macroeconomic and geopolitical uncertainty

Over the short term, macroeconomic conditions are expected to remain uncertain. While tariff uncertainty is creating some concern, impacts of changes in tariffs across the globe is being monitored closely. Datatec has proven to be resilient against several macroeconomic risks that persist.