Data#3 has delivered an increase in sustained earnings for the first half of the 2017 financial year, backed by continued cloud services growth.
For the six months ended 31 December 2016, the Brisbane-based IT solutions provider reported a 10.6 per cent rise in revenue, reaching $506 million with cloud-based revenues totalling $58 million.
With gross profit up 8.1 per cent to $74 million, product revenue also increased 11.5 per cent, hitting $413.9 million for 1H FY17.
Meanwhile, services revenue was boosted 6.6 per cent to reach $91.3 million.
“The solid financial and operational results reported today reflect our strategic and increasing focus on growing our portfolio of services,” Data#3 CEO and Managing Director, Laurence Baynham, said.
“This includes the rapidly growing cloud services market and I am confident that we are well positioned to satisfy market demand.”
Illustrating the company’s strategic shift to a cloud focused services play, Data#3 continues to change amidst a rapid shift to consumption-based and service-centric solutions.
Driven by increased adoption of digital solutions, and a heightened need for greater security, the company is betting on a public cloud market expected to become mainstream in the near future.
As reported by ARN, such predictions are nearing reality, with worldwide spending on public cloud services and infrastructure expected to reach $US122.5 billion in 2017, representing an increase of 24.4 per cent over 2016.
As enterprises across the world increase investment, overall public spending is expected to surge 21.5 per cent by 2020, nearly seven times the rate of overall IT spending growth.
In looking ahead to the long-term, Baynham said Data#3’s future is based on delivering sustained profit growth through growing services revenue with an increase in annuity, alongside boosting the company’s cloud capabilities.
“We are confident that we have the right strategy to underpin sustainable growth in long term shareholder returns,” Baynham added.
“Our first half performance and pipeline of opportunities provides a solid foundation to achieve our objective of improving on the company’s 2016 full year profit.”
Spanning cloud, mobility, consulting, data and analytics, IT lifecycle management and security, Data#3 owns three integration centres and three data centres, employing over 1100 staff in eight offices across the country.
“Data#3’s performance both in increased profit and continuing strong cash flow allowed the board to declare a 34 per cent increase in first half dividend to 3.35 cents per share,” Data#3 Chairman, Richard Anderson, added.
At the time of publication, Data#3's shares were trading at $1.76.