NEW STRATEGY PAYING OFF FOR DATA#3

Written on the 22 August 2016 by James Perkins

NEW STRATEGY PAYING OFF FOR DATA#3

DATA#3 (ASX: DTL) has posted a 30.4 per cent increase in net profit after tax to $13.8 million in FY16, driven by a big jump in revenue from its cloud-based services in a sign that its change in strategy is paying off.

Today's result was above guidance that the company issued in late July and Data#3 shares are trading up 3.25 per cent this morning, which builds on the 10 per cent increase the company registered after July's update.

CEO Laurence Baynham (pictured) says, "The FY16 results reflect the company's strategy of transitioning from primarily a product centric approach to an increasingly service centric approach in a rapidly changing IT environment.

"We are currently on track with our strategic plan, which contains three long-term objectives, being to deliver sustained profit growth; to grow services revenue with an increase in annuity and an increase in margin; and to grow cloud services revenues."

Revenue from the cloud was up 110.5 per cent to $98.93 million. The focus on services resulted in an overall revenue increase for that sector of the business of 16.9 per cent to $187 million, but the company's product revenue also contributed strongly to the result, up 12 per cent to $793.95 million on the previous year.

Data#3 has reported three earnings upgrades in 18 months and this is the fourth consecutive half-year reporting period of growth for the company.


Data#3 headline results:

  • Revenue is up 13 per cent to $983.2 million
  • Gross profit up 13.2 per cent to $146.6 million
  • Net profit before tax up 28.2 per cent to $19.5 million
  • Net profit after tax up 30.4 per cent to $13.8 million
  • EPS up 30.4 per cent to 8.98 cents per share
  • Strong balance sheet with minimal debt
  • Total dividend up 27.0 per cent to 8.0c per share.


Baynham remains cautious, saying business conditions will be challenging in FY17, with traditional technology investments remaining flat.

"However, we are seeing digital technologies leading business transformation in both commercial and public sector organisations. Data#3, together with the consulting team at Business Aspect, are well positions to enable this transformation and capture new investment."
The financial goal for FY17 is to continue to deliver earnings growth and returns to shareholders, says Baynham.


Author: James Perkins Connect via: Twitter LinkedIn

Latest News

PROFIT BOOST FORECAST AT VILLA WORLD

VILLA World has forecast profit growth of 5 per cent in the first half of FY17 in an earnings guidance released to th...

WP CURVE SOLD TO GODADDY

NASDAQ-listed tech company GoDaddy has bought Gold Coast's WP Curve for an undisclosed sum.

The subscription-b...

BOARD SHAKE-UP TAKES OUT SURFSTITCH FOUNDER

ONLINE actionwear retailer SurfStitch Group (ASX: SRF) has announced a major board shake-up in a move that effectivel...

ORIGIN TO DIVEST UPSTREAM OIL AND GAS BUSINESS

ORIGIN Energy will spin off its upstream oil and gas business in an as-yet unpriced IPO.

It will allow the Sydney-...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter