Data#3 has informed the market that a stronger second half to its financial year should produce its best full-year result since listing on the Australian Stock Exchange.
In the first half of the financial year, to December 30, Data#3 reported revenues of $83.5 million and an EBITDA profit of $2.46 million. Based on a particularly strong May, the company expects revenues of around $170 million and EBITDA profit of around $5 million for the full year.
Like most IT companies, the IT reseller ran into difficulty around 18 months ago when the IT bubble burst but has since moved to adjust and better manage its cost structure.
The positive results this financial year were gained through the simplest of business equations, said Data#3 CEO John Grant. "We focused on product sales to drive revenue on a fixed-cost base," he said. "Even with margins thinning down, as long as your cost base is low that margin will always drop to your bottom line."
Grant said the sale of hardware (desktop and server) products performed well, and the year was Data#3's best ever in terms of software licensing revenue.
Data#3 also managed to turn around its recruitment and integration services businesses, which performed poorly in the first half of the year. "We pulled our horns in a little bit, and won some projects in NSW, which contributed significantly," he said. The company was still committed to its technology integration and recruitment businesses, he said.
Grant said government expenditure in the business market should drive sales in the IT sector in the coming financial year, and he is thus confident market conditions should improve. "It should be a stronger year for the ICT sector, albeit against a fairly weak one," he said.