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Slow down in PC spending impacts Dicker Data's revenues

Slow down in PC spending impacts Dicker Data's revenues

Revenues decreased 3.6 per cent to $213.8 million and NPAT slid 10.9 per cent to $3.3 million

Dicker Data's David Dicker

Dicker Data's David Dicker

ASX-listed IT distributor, Dicker Data (ASX:DDR) has blamed a slowdown in PC demand and delays in education spending for its revenue decrease in the first half of FY13.

Dicker Data reported a NPAT decrease of 10.9 per cent to $3.3 million and revenues were also down 3.6 per cent to $213.8 million in its FY13 half-year results ending December 31. This is in comparison to the same period last year, where revenue reached $221.7 million. Gross profit was flat at $16.2 million and gross margin increased from 7.3 to 7.6 per cent.

The distributor stated the first half year results were positive and in-line with its traditional trend of experiencing a stronger second half. It also said the decline in revenue was expected and in-line with its strategy to move to a higher margin product mix.

In a statement to the ASX, Dicker Data CEO, David Dicker, said it experienced lower overall IT spend from the corporate and SMB sectors, and witnessing a slowdown in demand in PCs, primarily impacting revenues from its HP Personal Services Group product line.

Despite this, the distributor said it was able to offset this significantly from other vendors with strong revenues derived from Lenovo, Asus and Buffalo, becoming a bigger part of its business.

Delays in spending in the education sector also impacted revenues, which Dicker said usually occurs in November and December, but shipments were delayed until January.

“Whilst revenue was down, this is still an exceptional result in a subdued market, when compared to the record growth experienced in the previous corresponding period,” Dicker said.

"Market conditions are still tough, however with the additional finance facility and expansion of warehouse capacity coming online in February, we are confident of achieving profitable growth."

The distributor is also expecting to reap the benefits of its custom-built website, which was launched in late December.

The website integrates real-time stock availability and ordering with its ERP system, providing resellers with more visibility and ordering accuracy.

"It is anticipated the new website should lead to growth in our online reseller sales," Dicker stated. "The new website has been specifically developed to allow continued development and provide additional new features and functionality to improve our reseller engagement."

The distributor recently secured $20 million financing facility from Macquarie Bank.

Dicker Data was trading at $0.81 at the time of publication.

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