DATA#3 REPORTS DECLINE, BUT REMAINS OPTIMISTIC

Written on the 19 February 2014

DATA#3 REPORTS DECLINE, BUT REMAINS OPTIMISTIC

A COMPETITION heat up and product mix changes have cost Brisbane business technology solutions company Data#3 (ASX: DTL) a decline in revenue and profits for half year 2014, according to its recent report.

In the six months to December 31 2013, revenue was down 1.8 per cent to $399.1 million and gross profit declined 6.8 per cent to $57.5 million, compared to the previous corresponding period.

Product gross profit saw the steepest drop, declining 11.7 per cent to $28.7 million, while services gross profit decreased 1.3 per cent to $28.8 million.

Reduced software sales in Queensland and hardware sales in Western Australia were said to play a significant role in the profit drop.

DTL managing director John Grant was disappointed with the results, but largely attributed the weaker performance to the unpredictable and competitive nature of the current market.

“We were on plan until December to achieve our budgeted performance, but the unpredictable market meant some forecasted deals slipped into the second half and we came in short,” he says.

Staff costs and operating expenses also drove profits down, with a strong impact on net profit after tax, which decreased by 62.3 per cent to $2.6 million.

However, Grant says these costs are more beneficial than not considering DTL’s position in a growing Hybrid IT environment.

“Costs were certainly driven down where they could be, but we believe further large scale cost reductions would be more damaging than beneficial at this stage.

“We are focused on driving the top line in the knowledge that small gains in revenue can deliver substantial increases in profit.”

In addition to this, Grant says there was a silver lining of strategic wins, which are expected to transpire over the coming months.

“We have recorded a number of strategic wins with outsourcing and cloud services at Brisbane Airport Corporation, AstraZeneca, Worley Parsons, McInnes Wilson Lawyers and Vale Australia that strongly endorse our Hybrid IT strategy.

“Our pipeline remains strong despite taking more time than we’d like to convert.”

DTL chairman Richard Anderson shared a similar point of view to Grant and was optimistic about the company’s long term strategy.

”In the long term, we are very well placed to generate growth in shareholder value,” Anderson says. “We have a strong business, no material debt, long term customer relationships, committed supplier partnerships and a great team.”

DTL was trading today at $0.85 per unit, down 4.49 per cent.


Latest News

SURFSTITCH DOWNGRADES EARNINGS AS SHARES PLUNGE 25 PER CENT IN A DAY

TROUBLED online sports clothing retailer SurfStitch is considering selling off more of its assets and will close i...

GOLD COAST AIRPORT RECORDS STRONGEST PERIOD IN HISTORY

The Gold Coast Airport recorded its strongest April in history for passenger numbers, supported by a growing numbe...

THE TRAVEL STARTUP THAT EVICTED THE HOUSE-SITTER

YOU'VE used Expedia to book the flights, AirBnB to find accommodation, and Uber to get around in the new city and...

MELBOURNE'S $200M RIALTO PROJECT NEARS COMPLETION AFTER 10 YEARS OF PLANNNG

IT'S BEEN 10 years in the planning and had at least 10 different architects and has involved the acquisition o...

Related News

SURFSTITCH DOWNGRADES EARNINGS AS SHARES PLUNGE 25 PER CENT IN A DAY

TROUBLED online sports clothing retailer SurfStitch is considering selling off more of its assets and will close i...

AUSCANN RESUMES TRADE AFTER $12 MILLION CAPITAL RAISING

IT'S BEEN a big few days for medical cannabis manufacturer AusCann (ASX: AC8), as the company emerged from a trad...

APN AND oOh!media MERGER CALLED OFF, CEO 'AMAZED' AT ACCC'S DECISION

THE PROPOSED $1.6 billion merger between Australia's two largest advertising groups, APN (ASX: APO) and oOh!me...

ANALYSTS FORECAST A GRIM CHOICE FOR OROTON: SELL UP OR QUIT THE ASX

FOLLOWING a warning to the market and a subsequent trading halt earlier in the week which has shaved more than $11...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter