Steady growth sees Data#3 exceed revenue and profit targets

Steady growth sees Data#3 exceed revenue and profit targets

Public cloud services revenues added $142.7 million in revenue pipeline

Laurence Baynham (Data#3)

Laurence Baynham (Data#3)

Credit: Maria Stefina

A steady pipeline of customer opportunities has set ASX-listed Data#3 on the course for growth during FY19.

During the first half of FY19 ending 31 December, the technology provider's total revenue was up 17.7 per cent to $644.4 million, which included $142.7 million of public cloud revenues.

Meanwhile, product revenue made up $532.1 million – up 19.2 per cent, while services revenue increased 11.3 per cent to $111.3 million.

Gross profit was also up 14.7 per cent to $82.3 million with net profit before tax moving up 123.3 per cent to $9 million, while net profit after tax rose 126.7 per cent to $6.1 million.

Data#3 CEO and managing director, Laurence Baynham, said the first half results delivered a significant improvement compared to the previous corresponding period, as the business returns to the longer term growth trend.

“The market is growing as digital transformation fuels the overall information technology spend, and we have experienced an increase in large project activity and a steady pipeline of opportunities,” Baynham said.

“The current period result demonstrates the inherent strength and relevance of our solution offerings in an evolving market, and we are delighted with the rapid growth in our cloud-based business.”

Looking ahead, Baynham remained confident that the Brisbane-based company can achieve its full year financial objective, in addition to delivering earnings growth and improving returns to shareholders.

Furthermore, Data#3 chairman, Richard Anderson, said that increased profit and continuing strong cash flow allowed the board to declare a 125 per cent increase in first half dividend to 3.60 cents per share.

During its Annual General Meeting (AGM) in November, Baynham confirmed that the business made a strong start to FY19, significantly improving on last year’s first half pre-tax profit of $4.0 million.

“To what extent we can do this remains dependent on opportunities that need to be realised through November and December," said Baynham at the time. "Our current first half projection is for pre-tax profit in the range of $7.0 million to $8.5 million.

"This is in line with our full year guidance to improve on FY18 results, and sees a return to more normal trading patterns, with a lesser second half skew than in FY18."

The first half results last year were put down to the decommissioning of Data#3’s cloud; a material shift of product profit to the second half due to delivery delays in December 2017 and the weak first half performance of Business Aspect.

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Tags Data#3public cloudLaurence Baynham

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