FY22 Highlights
Commenting on the FY22 result, Data#3 Chairman Richard Anderson said: “We are pleased to deliver another record result, underpinned by our leading market position built up over 45 years, the strength of our supplier relationships and customer base, and our exceptional team. In line with our strategy, it reflects the growing contribution from our higher-value services offerings, demonstrating the growing demand for our solutions especially for large infrastructure and digital transformation projects. The result would have been even stronger were it not for a significant order backlog as global supply chain delays persist, although this gives us a fast start to FY23.”
Revenue and earnings growth in FY22
Total revenue increased by 12.1% to $2.2 billion reflecting growing demand for Data#3’s solutions in a rapidly evolving market. This included strong growth in public cloud revenues, up 31.3% to $1.0 billion as major organisations and Government departments accelerate migration to cloud-based infrastructure. The consolidated net profit before tax increased by 19.4% to $44.1 million, consistent with the guidance provided on 14 July 2022.
The FY22 result was impacted by extensive product delivery delays related to continued supply chain constraints, as has been experienced across the industry, particularly for major infrastructure projects. This resulted in a significant backlog of orders that could not be delivered or invoiced at year end. The pre-tax profit associated with this backlog is at least $6 million, which is expected to be realised in the first half of FY23. This compares to the $3 million backorder at the end of FY21.
Through excellent working relationships with its global vendor partners, Data#3 has secured critical deliveries for customers, thereby mitigating some of these supply chain delays. Supply constraints for various product sets are expected to continue well into FY23, and Data#3 is well placed to manage the best possible outcome for its customers.
The consolidated net profit after tax increased by 19.1% to $30.3 million. Basic earnings per share increased by 18.8% to 19.61 cents.
Financial Results Summary
The company’s non-financial measures indicate the underlying health of the business has continued to strengthen. Staff and customer satisfaction surveys produced record high results, and Data#3 succeeded in winning a cross-industry Employer of Choice award for the seventh year in a row. The company has continued to be recognised by many of its global partners with national and international awards.
Dividend
The directors declared a final dividend of 10.65 cents per share, bringing the total fully franked dividend for FY22 to 17.90 cents per share. This represents an increase of 19.3% and a payout ratio of 91.3%.
The final dividend will be paid on 30 September 2022, with a record date of 16 September 2022.
CFO Transition
Brem Hill has advised the board of his intention to retire as CFO at the end of calendar year 2023, having been with the company since 1991 and serving as CFO since 1999. This will allow for a candidate search and selection process to commence immediately and provide a period during which he will support an orderly transition to the new CFO.
Data#3 Chairman Richard Anderson said: “Brem has been with the business over 30 years during which time he has provided sound financial leadership while Data#3 has evolved from a small private company to a successful public company. On behalf of the board, we thank Brem for his outstanding commitment, loyalty and contribution.”
Outlook
The group’s performance continues to be underpinned by its leading market position, unrivalled vendor relationships, large and long-term customer base and highly experienced and committed team.
Data#3 Chief Executive Officer and Managing Director Mr Baynham said: “We expect technology, and specifically digital transformation, to play a leading role in Australia’s economic future, irrespective of any ongoing impacts of the pandemic.
We continue to experience a steady increase in the pipeline of large integration project opportunities across our corporate and public sector customers, and our services growth strategy will improve our overall margin profile while complementing our growing software and infrastructure business units.
The backlog from FY22 has again provided a fast start to the current year, and we are well positioned to capitalise on opportunities this provides. In line with previous years, we continue to expect to deliver sustainable earnings growth.”
