Data#3 gains uplift in 1H21 thanks to public cloud demand and ongoing contracts

62% of total revenue was derived from government and large corporate customers during the half year.

Data#3 has reported that during the first half of the 2021 financial year the company has managed to sustain growth, which is consistent with its long-term strategy.

For the period to December 31, Data#3 saw an 8% bump up in net profit after tax from AU$8.7 million to AU$9.4 million. Total revenue was up just over 19% to nearly AU$857 million and, of that total, its public cloud revenue accounted for AU$346 million, which was up 37.4% from AU$252 million.

Total gross profit remained steady and sat at around AU$89.7 million for the half.

"We are pleased with the first-half performance, delivering another record result despite the challenging environment and changing market conditions," Data#3 CEO and managing director Laurence Baynham said.

"Once again, this result clearly demonstrates the inherent strength and relevance of our solution offerings in an evolving market. It is also reassuring that approximately 62% of our total revenue is recurring, derived from contracts with government and large corporate customers, fulfilling their essential IT requirements."

See also: 70% of IT leaders say security concerns restrict adoption of public cloud (TechRepublic)

The company also reported that staff costs increased by 2.5% to almost AU$67 million due to a bump in headcount. However, this was offset by operating expenses, which dipped by 18.4% to AU$9.7 million due to a large reduction in travel costs as a result of the pandemic and rent savings from the decommissioning of the Data#3 Cloud platform.

Data#3 also advised that it expects pre-tax profit for the first half of FY21 to be near the top end of the guidance provided during its annual general meeting in November. It will approximately be AU$13.7 million, up 8-9% on the previous corresponding period, the company said.

Looking ahead, Baynham said while COVID-19 would continue to bring about market uncertainty in the short term, the long-term outlook is a positive one.

"We continue to see growth in the Australian IT market, and believe we are well-positioned to capitalise on that opportunity as we continue to develop and offer solutions for our customers' changing requirements," he said.

"The solid first-half performance and pipeline of opportunities for the second half give us confidence that we will achieve our full-year financial objective, being to deliver sustainable earnings growth."

Last August, the company reported it was hit by a non-identifiable cyber incident that impacted 28 customers. At the time, Data#3 said it was working with a forensic investigator to report on the incident.

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