Data#3 posts record results

Data#3 has racked up a massive year, trumpeting a best-ever result and predicting similar results in the year ahead, despite tricky economic conditions.

Revenue rose from $599.2 million to $697.8 million, up 16.5 per cent. This brought earnings before tax, depreciation and amortisation (EBITDA) up 30.4 per cent to $21.2 million. Net profit after tax was up 37.4 per cent to $15 million.

Data#3 managing director John Grant said that the results were due to Data#3's execution of its strategy to build a national footprint, ensure high levels of customer service and develop new products through partnerships.

Hardware and software product revenues grew by 14 per cent to $586.4 million, with services revenue growing 29 per cent to $109.8 million. Infrastructure Solutions revenue rose 21 per cent to $301 million, while People Solutions revenues rose 25 per cent to $38.3 million.

The company is investing in new and refurbished premises in NSW and Victoria, and has already spent money on premises in Queensland. It will also be investing money into its supply chain.

The PC reselling business has increased dramatically for Data#3 due to companies like Commander exiting the fold.

Data#3 is now spending on supply chain software to automate the supply chain so that a customer can order kit without having to talk to a person until the goods are shipped.

This requires integration on the customer end and a new order processing system for supply. Data#3 has bought a system from US firm Astea International, and has signed a contract with another US company for a customer portal, according to Grant.

This will help with increasing product volumes, according to Grant, and will also allow the company to provide an advanced level of customer service.

The company pointed to a Queensland government central procurement contract for HP desktops, laptops and servers, which Data#3 had supplied as a possible risk area going forward. The contract is coming up for renewal this year.

Grant said that he believed HP's recent announcement, about spinning off its PC arm, was a positive move, as it would see that part of the business was able to run, uninhibited by the other sections of the business as the company shifts strategy to focus on software and services.

Even if it was bought, the buyer would be interested in continuing the business, he believed, as it was too big to just shut down. "There are so many HP customers," he said.

"I don't think anyone is going to lose out."

Another change that the company pointed out for the year ahead was to do with Microsoft, which has altered its reseller model.

Customers will make monthly payments on enterprise contracts instead of reducing yearly payments. This would affect cash flow, as customers come off three-year enterprise agreements, according to Grant, although he said that he didn't expect margins to be affected, and that Data#3 would see less change than other resellers because of its government customer base.

Grant said that business confidence in the year ahead would depend on global economic conditions, and businesses and governments investing to up productivity.

"Over FY12 we will be making a number of investments in new premises and systems, returns from which will flow into future years. We are well placed to continue growing revenues and earnings as we extend our offerings for customers into the cloud, build out new consulting offerings, and further automate business processes to increase efficiency and enhance customer service.

"With our national footprint and the broad appeal of our offerings, we are targeting to once again deliver growth ahead of the market in all areas of the business in FY12. In addition we will remain watchful for partnering and acquisition opportunities mindful of the cultural and financial issues that accompany them. Our overall financial objective is to improve on the performance of FY11."

One aspect of the company's success was going to be grounded in its listening to customers on cloud products, according to Grant, who said that Data#3 had organised its offerings to include hybrid cloud and on-premise products, which was what customers were looking for.