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Data#3 predicts another record result

Data#3 predicts another record result

ASX-listed integrator expects pre-tax profits to increase by 21 per cent year-on-year

Queensland-based integrator, Data#3 (ASX: DTL), is predicting another record June 30 financial result and a 21 per cent increase in pre-tax profits year-on-year.

In an ASX statement, the company said it expected total revenue would exceed $360 million, up from $285 million in the 2007 financial year. Pre-tax earnings are also expected to reach $12 million over the same period, up from $9.9 million.

Managing director, John Grant, said its second half performance surpassed expectations and chalked up 24 per cent growth year-on-year. He attributed the bulk of the result to its core infrastructure, licensing and people solutions business but was unable to specify which areas had experienced strongest growth at this stage.

Data#3's recruitment of more than 40 ex-Commander staff in February, including new software licensing teams in Adelaide and Perth and increased infrastructure staff in Sydney, Melbourne, Adelaide and Brisbane, was also paying dividends, Grant said.

In its interim report in March, the integrator warned the rapid investment in staff may not be offset by revenue in the short-term.

"We flagged the expense [of the staff investment] - about $3 million - but were conservative about what gross margins we might achieve on this. Happily, it has at least broke even which is a really good outcome in just four months," Grant said. "We expect this [investment] will make more positive contributions in the next financial year."

Likewise, Data#3's acquisition of Sydney-based Fingerprint Consulting Services earlier this year was a positive contributor to the results. The company has since invested in five additional Fingerprint staff and already made up that expense, Grant said.

The next step was to see how the economic gloom impacted on results in the new financial year, he said.

"I've just come back from the UK and there's no doubt there is a lot of pessimism, which is manifesting itself as restraint," Grant said. "There are expectations that profitability will come off but there's not a lot of evidence yet. It's hard to work out how much of this is sentiment and reality."


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