Data#3 delivers record revenues ahead of industry trend

However, MD John Grant warned the market remained volatile and very difficult to predict

ICT company, Data #3, has announced record revenues of $811.4 million for the 2012 financial year ending June 30, an increase of 16.3 per cent, well ahead of overall industry growth.

But managing director, John Grant, also warned that a volatile market meant the year ahead was difficult to predict.

Data#3 shareholders won't be worrying too much though. The company's directors declared a final fully franked dividend of $0.0355 per share, bringing the total dividend for FY12 to $0.07/share fully franked. The final dividend will be paid on September 28.

Overall, Net profit after tax (NPAT) of $13.7 million, while down on the previous year, was ahead of the long term trend and over the last five years represented a compound annual growth rate of 14 per cent.

FY12 financial performance in nutshell was:

  • Revenue up 16.3 per cent to $811.4 million
  • EBITDA down 8.3 per cent to $19.4 million
  • EBIT down 10.8 per cent to $18.3 million
  • NPAT down 8.8 per cent to $13.7 million
  • Earnings per share down 8.8 per cent to $0.0888
  • Return on equity eased slightly to 42.1 per cent, but remains sector-leading
  • Strong balance sheet with no material debt.
Data# chairman, Richard Anderson, said that while the FY12 results were slightly below the exceptional performance of the previous year, the company was pleasingly ahead of the long term trend.

“In a difficult market, Data#3’s product and service offerings have continued to generate growth well ahead of the industry average. Our revenues broke through the $800 million mark for the first time, achieving a record top line result for the company.

Operational performance

Managing director, John Grant, said the FY12 result was solid considering the difficult economic environment and the resulting tendency for a number of customers to delay major IT projects. “Data#3 has achieved solid revenue growth in a period of challenging industry dynamics. With the previously foreshadowed higher levels of business reinvestment, profit for the 2012 financial year was slightly below the exceptionally strong 2011 result, yet still above the long term growth trend. On balance, we see this as a very good outcome that positions Data# 3 well for the 2013 financial year,” he said.

Hardware and software product revenues grew by 17.5 per cent to $689.1 million, driven by very significant growth in licensed software sales.

Total services revenues grew by 9.7 per cent to $120.4 million, reflecting very strong growth in managed services.

Specialist business

In terms of Data#3’s specialist businesses:

  • Sales of licensed software grew for the 17th consecutive year with revenue up 35.5 per cent to $483.4 million. Revenue under contract increased 35 per cent to $363 million, services revenues from asset management and its new business productivity practice grew strongly, and the Federal Government Microsoft software contract was renewed during the year. Sales and implementations of infrastructure related solutions were most affected by the difficult market conditions with overall revenues declining 5.5 per cent to $284.7 million as major investment projects were delayed or deferred. The resulting decline in hardware product sales and project services was offset by 30 per cent growth in managed services revenues to $45.7 million.
  • Revenues from contracting and permanent recruitment grew steadily in a restrained market finishing 8 per cent up at $41.4 million. A decline in contractor numbers over the previous year was offset by strong growth in permanent placements.

Commenting on the outlook for Data#3, Grant said, "The market remains volatile and is therefore very difficult to predict. We don’t see this changing until global economic conditions stabilise and local political uncertainty is resolved.

"We do however see an increasing realisation that in spite of this, there remains an overarching need for business and government to transform their business models and increase productivity. “Over the next 12 months we will continue to make a number of internal investments in new applications and systems, the returns from which will flow into future years.

“We are well placed to continue growing revenues and earnings as we extend our offerings for customers into the Cloud, build out our consulting and services capabilities, and further automate business processes to increase efficiency and enhance customer service."

2 Comments

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