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Data#3 results buoyed by product and managed services growth

Data#3 results buoyed by product and managed services growth

ASX-listed integrator reports 16 per cent year-on-year growth in pre-tax profits to $6.8 million

ASX-listed integrator, Data#3 (ASX: DTL), is predicting 16 per cent growth in pre-tax profits for its first half, according to preliminary figures.

In an ASX statement, the company said unaudited pre-tax profits reached $6.8 million in the six months to December 31, 2009, a rise of 16 per cent year-on-year. It also expected revenue to increase by 34 per cent, driven by 40 per cent growth across its products business. Services revenue was predicted to remain on par with the previous half-year.

Data#3 managing director, John Grant, said its products result was lifted by billing timeframes changes across its Federal Government Microsoft licensing contract. This, however, was counteracted by a switch to second-half billing in a significant Queensland Government contract. Overall, he reported strong state government sales in NSW and Victoria.

“We saw strong growth in our procurement business, which is really the story behind the revenue rise,” Grant told ARN But he was cautious about second half expectations. “Our view remains that the constraints implicit in 2009 will continue. We had good pre-tax profit and revenue growth, but I think that was the result of marketshare growth.”

Services revenue, meanwhile, was affected by a contracted recruitment and contractors market in the last six months, but operational changes allowed Data#3 to increase profitability across the division, Grant said.

Decline in recruitment work was offset by significant managed services growth over the six-month period. In the past year, Data#3 has split out its managed services practices into a separate business unit and appointed a dedicated national general manager, along with an east coast field sales team.

“This has boosted our capability dramatically and we seem to be on track,” Grant said.

Data#3 has continued to report record financials over the last 18 months despite the tougher economic market conditions. In its full-year 2008/2009 result, the integrator posted a net profit increase of 8 per cent to $9.8 million, while total revenue rose 46 per cent to $530.5 million.

First-half results will be confirmed and announced to the market on February 22.


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