For management's internal purposes the Group is currently organised into three 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 solutions provider of digital services; and
• Corporate and Management Consulting: Management Consulting provides strategic, trusted advisory, modelling and market intelligence services to the TMT industries. Corporate includes Group head office companies and Group consolidation adjustments.

			WESTCON INTERNATIONAL~				LOGICALIS
US$'000			Unaudited  Six months  to 31 August  2021	Unaudited  Restated^ Six months  to 31 August  2020	Audited  Year ended  28 February  2021		Unaudited  Six months  to 31 August  2021	Unaudited  Restated^ Six months  to 31 August  2020	Audited  Year ended  28 February  2021
REVENUE			1 390 520	1 237 763	2 585 678		822 859	693 105	1 449 543
Revenue from product sales			1 353 051	1 202 482	2 508 973		501 844	397 808	839 512
Revenue from sales of hardware			814 036	748 629	1 529 146		353 785	336 431	654 739
Revenue from sales of software*			532 220	440 756	946 877		148 097	61 268	184 439
Revenue from vendor resold services and product maintenance sales			34 720	31 618	69 736		–	415	747
Inter-segmental revenue			(27 925)	(18 521)	(36 786)		(38)	(306)	(413)
Revenue from services			34 600	31 579	68 010		111 323	96 341	209 267
Revenue from professional services			34 956	31 662	68 241		111 323	96 341	209 267
Inter-segmental revenue			(356)	(83)	(231)		–	–	–
Revenue from annuity services			2 869	3 702	8 695		209 692	198 956	400 764
Revenue from cloud services			–	–	–		33 862	21 400	47 653
Revenue from software services*			2 869	3 732	8 754		–	–	–
Revenue from other annuity services			–	–	–		175 830	177 556	353 111
Inter-segmental revenue			–	(30)	(59)		–	–	–
Restructuring costs			–	(3 777)	(7 764)		–	(2 171)	(14 138)
EBITDA			30 974	19 225	44 782		46 490	43 037	81 931
RECONCILIATION OF OPERATING PROFIT/(LOSS) TO PROFIT/(LOSS) FOR THE PERIOD
Operating profit/(loss)			19 010	8 577	22 215		24 727	23 151	40 265
Interest income			337	473	728		1 417	432	770
Finance costs			(4 935)	(5 339)	(10 933)		(10 952)	(9 114)	(16 373)
Share of equity-accounted investment earnings			–	–	–		171	211	362
Acquisition-related fair value adjustments			–	–	–		–	69	–
Other (loss)/income			(4)	284	55		–	–	–
Profit/(loss) before taxation			14 408	3 995	12 065		15 363	14 749	25 024
Taxation			(1 996)	(2 250)	(3 694)		(5 041)	(6 539)	(13 813)
Profit/(loss) for the period			12 412	1 745	8 371		10 322	8 210	11 211
ASSETS AND LIABILITIES
Total assets			1 388 415	1 210 744	1 336 059		1 386 624	1 360 073	1 296 818
Total liabilities			1 293 906	1 047 302	1 170 444		1 002 593	985 973	935 536

 

		CORPORATE AND MANAGEMENT CONSULTING~				DATATEC GROUP TOTAL
US$'000		Unaudited  Six months  to 31 August  2021	Unaudited  Restated^ Six months  to 31 August  2020	Audited  Year ended  28 February  2021		Unaudited  Six months  to 31 August  2021	Unaudited  Restated^ Six months  to 31 August  2020	Audited  Year ended  28 February  2021
REVENUE		43 640	32 046	74 242		2 257 019	1 962 914	4 109 463
Revenue from product sales		–	–	1 049		1 854 895	1 600 290	3 349 534
Revenue from sales of hardware		(21 807)	(11 259)	(20 948)		1 146 014	1 073 801	2 162 937
Revenue from sales of software*		(6 096)	(7 503)	(14 944)		674 221	494 521	1 116 372
Revenue from vendor resold services and product maintenance sales		(60)	(65)	(258)		34 660	31 968	70 225
Inter-segmental revenue		27 963	18 827	37 199		–	–	–
Revenue from services		39 319	28 635	65 553		185 242	156 555	342 830
Revenue from professional services		38 963	28 552	65 322		185 242	156 555	342 830
Inter-segmental revenue		356	83	231		–	–	–
Revenue from annuity services		4 321	3 411	7 640		216 882	206 069	417 099
Revenue from cloud services		–	–	–		33 862	21 400	47 653
Revenue from software services*		–	(30)	(59)		2 869	3 702	8 695
Revenue from other annuity services		4 321	3 411	7 640		180 151	180 967	360 751
Inter-segmental revenue		–	30	59		–	–	–
Restructuring costs		–	–	(476)		–	(5 948)	(22 378)
EBITDA		(2 496)	(1 542)	(8 081)		74 968	60 720	118 632
RECONCILIATION OF OPERATING PROFIT/(LOSS) TO PROFIT/(LOSS) FOR THE PERIOD
Operating profit/(loss)		(4 673)	(3 733)	(12 507)		39 064	27 995	49 973
Interest income		107	272	397		1 861	1 177	1 895
Finance costs		(145)	(149)	(281)		(16 032)	(14 602)	(27 587)
Share of equity-accounted investment earnings		333	250	546		504	461	908
Acquisition-related fair value adjustments		–	–	–		–	69	–
Other (loss)/income		–	–	–		(4)	284	55
Profit/(loss) before taxation		(4 378)	(3 360)	(11 845)		25 393	15 384	25 244
Taxation		(1 596)	(1 180)	(2 033)		(8 633)	(9 969)	(19 540)
Profit/(loss) for the period		(5 974)	(4 540)	(13 878)		16 760	5 415	5 704
ASSETS AND LIABILITIES
Total assets		214 997	136 647	164 381		2 990 036	2 707 464	2 797 258
Total liabilities		46 375	41 483	50 657		2 342 874	2 074 758	2 156 637

*	Includes software as a service revenues.
~	Datatec Financial Services has been included in the Westcon International segment in August 2021, and in the Corporate segment in August 2020 and February 2021.

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.

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 31 August 2021 amounted to US$28.3 million (H1 FY21: US$19.0 million; FY21: US$37.5 million). During the period, the Group made sales totalling US$28.1 million (H1 FY21: US$37.4 million; FY21: US$58.2 million) and received management fees of US$0.2 million (H1 FY21: US$0.2 million; FY21: US$0.4 million) from its associate Esource Resources, LLC. As at 31 August 2021, US$4.0 million (H1 FY21: US$5.3 million; FY21: US$1.1 million) was due from Esource Resources, LLC and US$0.01 million (H1 FY21: US$0.1 million; FY21: US$0.03 million) was due to Esource Resources, LLC.

^H1 FY21 revenue restatement

The Group sells certain software, software services and cloud computing solutions which include Infrastructure as a Service ("IaaS") and Software as a Service ("SaaS"). As disclosed in the FY21 published results, these amounts grew in significance for the Group, and the Group revisited the revenue recognition for these arrangements. The Group's vendors continuously change the way in which they bring their products and services to market and there is a significant amount of judgement involved in determining whether or not the Group acts as an agent or principal with regards to these arrangements. In its reassessment, the Group concluded that in those arrangements where the software service is delivered entirely by the vendor, or where the updates and cloud access are critical to the effectiveness of the solution and there is no material on-premise component to the solution, the Group will recognise revenue at the time of invoice on a net basis as the Group is acting as an agent in the transaction.

As a result, the Group has restated its H1 FY21 consolidated statement of comprehensive income to reflect only the fees earned, for acting as an agent in these arrangements, as revenue. This has resulted in a decrease in revenue and a corresponding decrease in cost of goods sold in H1 FY21. There was no impact on gross profit or items below gross profit in the consolidated statement of comprehensive income. In addition, there was no impact on earnings or earnings per share.

Note that despite the revenue being disclosed on a net basis, the Group has a contractual right to the gross amount of cash related to the gross revenue and therefore, for any amounts remaining unpaid at the period end, the Group continues to present these amounts as gross trade receivables in the consolidated statement of financial position. The restatement has no impact on the consolidated statement of financial position or consolidated statement of cash flows.

US$'000		Before  restatement	After  restatement	Total  restatement
Six months to 31 August 2020
Revenue		2 031 205	1 962 914	(68 291)
Cost of sales		(1 706 963)	(1 638 672)	68 291
Gross profit		324 242	324 242	–