Published on the 11/08/2016 | Written by Newsdesk
Revenue up 13 percent, 25 percent increase in capex…
The data business is good. With its results announced this week, broad-based technology solutions company Datacom delivered revenue growth which takes it to a turnover of NZ$1.058 billion. On the back of that whopping big number, it reported profit after tax of NZ$27.2 million, up 11.9 percent.
Group CEO Jonathan Ladd said the company has decided to put a lot back into the business to grow at a time of disruption. “Rather than throttle back, our opex and new investment lines have seen spend of $18 million; that is profit straight back into the business. We’re turning around a good proportion of cashflow and doing that rather than taking out dividends.”
It is, he agreed, an environment where the market today is not going to be the same as it will be tomorrow. “That demands an enhanced investment regime. In terms of where the competition is, our investment in infrastructure and the [use of] operating expenditure which clips of profit means we have put well over $100 million into the business over the last few years.”
In a statement, company chair Craig Boyce described the result as excellent and said the strong revenue growth has increased the 10 year compound annual growth rate to 11.5 percent, up from 11.2 percent the previous year.
“The Group profit before tax was $41.2m, which is an increase of 16.7 percent on last year, and along with the revenue growth this represents a very positive performance from the business.”
Datacom in Australia and Asia delivered a revenue increase of 12.9 percent over the previous year; the New Zealand operation increased revenue by 13.1 percent, continuing a trend of continuous growth over the last decade.
Capital expenditure increased by 35 percent over the prior year to $40.6m. This, the company said, reflects its ‘ongoing work to standardise and rapidly enhance all infrastructure, security and business services to support coordinated Australia and New Zealand growth’. It also reflects the reality of rapidly changing environments which depend on continual investment to deliver to the enhanced digital expectations of customers.
This is further evident in the operating expenditure on new investment lines of business to which Ladd has drawn attention, of $17.9m, which is up 58.4 percent over the 2014-2015 year. Datacom said it continues an investment programme of operational expenditure into business enhancement and the evolution of new products and services, predominantly in its own intellectual property and vertical markets specialisation.
In the company’s statement, Ladd said it has expanded to ensure that it can bring to market the benefits of new technologies. It opened four new offices over the year and now operates from 29 locations across New Zealand, Australia, Malaysia, Philippines, the UK and the USA.
Australia Systems delivered growth driven by customer demand for hybrid cloud services and new software offerings, and by a number of wins with medium to large enterprises and across State and Federal Government. Third-party products sales have continued to perform well over the year.
The push of Datacom’s software development operations into the Australian market continued, with increased delivery capabilities in both Melbourne and Sydney. This produced a number of new customer wins, it said, providing ‘real growth opportunities in the wider Australian market’.
Ladd described the IT market as being in “A phase of hyper-change. Any success is built via agility.”
The company said transformational digital practices, data analytics, enterprise, and industrial mobility offerings are driving new consultancy engagements across Australia and New Zealand, with sharp growth for cloud applications transformation services and demand for WAN, LAN and wireless networks.
It also said the attraction and retention of the most talented ICT professionals in market is a constant area of focus ‘at a time of industry-wide skills shortages’.
In the year ending March 2016, it said employee numbers totaled 4,661, an increase of 13.8 percent, with 2,729 in New Zealand and 1,932 across Australia and Asia.
