Despite a sharp decline in the performance of its dot.com related business, IT distributor and systems integrator, Com Tech Communications has increased operating profit 40 per cent to $A22.8 million in the six months to March.
The company's results stood out amongst the interim financial results of parent company Dimension Data which also reported a 40 per cent boost in earnings to US$122million, before a US$227 million charge for goodwill amortisation.
Com Tech, which will take on the Dimension Data name in July, showed the lowest profit margins of the six businesses in the Dimension group. The $A22.8 million profit was made on turnover of $A385 million, which puts the average margin on sales at 5.8 per cent compared to 10.8 per cent for the Dimension group. Last year, Com Tech made a profit of $A42.5 million on turnover of $A774 million in the year ended September 30, 2000.
David Shein, Com Tech's chairman said the firm's distribution business has benefited from the recent rationalisation of the market, picking up several new contracts including Adobe Systems. However, the company took a considerable lashing in the dot.com backlash, after investing heavily in people and infrastructure to cater to the growing demand for web services.
Shein says the strongest growth is in networked services, especially voice-data convergence.