Dicker Data posts strong profit result despite lower revenue
- 30 August, 2013 11:30
Dicker Data has posted strong full-year results with a net profit of $9.2 million despite lower revenues and difficult economic conditions.
The net profit result was up 11.7 per cent on the previous year’s 8.3 million off the back of a continued strategy to align revenue with more profitable product lines and an agreement with HP which extended their distribution agreement to include access to the full range printing and supply products to resellers.
Revenue for the year was $452 million, down 0.9 per cent on the same period last year. This was a solid result given the downturn in PC sales in SMB sectors impacting revenues from some of our key vendors. Most of the decline came from HP Personal Services Group and Toshiba. This was significantly offset by an increase in revenues from Lenovo (new vendor since June 2012) and strong education orders in second half of FY13, resulting in an increase year on year in revenue for the second half.
The dividend paid for the year was $0.0625 per share, an increase of 16.6 per cent on the previous year.
In August 2012 the company entered into a contract to extend the current warehouse facility by an additional 5000sqm.
The extension more than doubled the existing warehouse capacity and sets the company up for future growth. Construction started in September 2012 and the project was completed on February 20, 2013.
CEO David Dicker was upbeat despite warning of another difficult year ahead for the company.
“The last year has been a pretty difficult one, with economic conditions still subdued,” he said. “However, as promised in our H1 report, we exceeded last year’s results, and by almost $1m. In the current economic climate this is an outstanding result by everyone at Dicker Data.
Dicker pointed to an improve in economic conditions after the election and the HP deal as reasons for optimism.
“The year ahead still looks difficult, but there should be some improvement after the Election. Despite relentless negativity in the media, I remain confident that conditions are not that bad and are steadily improving,” he said.
“The share of our business with other vendors had a pleasing increase delivering 40 per cent of our revenue with HP providing the rest. We finally got access to HP’s printers and their supplies products. We now have the full HP range.
“Our shares have been trading extremely well and closed at $0.90 on June 28. As we listed at $0.20, this is a very satisfying outcome, although we are still struggling to convince the analyst community.”