Data^#3 projecting first half revenue growth with profit ahead of long term trend

Summary:

• Revenue growth of 15% for the six months ended 31 December 2011 (1H12), well ahead of overall industry growth in an uncertain and hence competitive environment
• As flagged previously, significant investment to support growth saw expenses increase against pcp
• 1H12 NPAT expected to be approximately 9.5% lower than the exceptionally high pcp, but well ahead of the long term trend.

BRISBANE, Wednesday 25 January 2012: Australian Information and Communications Technology leader Data^#3 Limited (ASX: DTL) today confirmed that its financial performance for 1H12 was expected to be consistent with previous guidance.

At its Annual General Meeting on 8 November 2011 the company forecast that 1H12 profit was not expected to vary materially from the exceptionally strong 1H11 result, with solid revenue growth offset by slightly lower margins and higher levels of growth investment.

In an uncertain and competitive market, revenue is expected to increase approximately 15%, well ahead of overall industry growth. Data^#3’s revenue growth was driven by solid growth in software product and support services. While subject to audit, 1H12 after tax profit is expected to be $7.2 million, approximately 9.5% below the exceptionally high 1H11 result, but well ahead of the long term trend.

“This is a very solid first half result, consistent with our expectations and ahead of the trend of recent years,” commented Data^#3 Managing Director, John Grant. “Data^#3 has achieved strong growth in revenues during a period of challenging industry dynamics. This performance is indicative of the company’s continuing ability to win market share.

“The market uncertainty caused by global financial and local political issues is causing some customers to defer capital expenditure for hardware product, and others to delay strategic transformational decisions and their associated IT services projects. This has impacted the performance of our Product and Integrated Solutions businesses. However, sentiment toward and hence growth of our Software Licensing, Managed Services and People Solutions businesses has remained positive.

“With the foreshadowed higher levels of investment, profit for the first half of the 2012 financial year has not varied materially from the exceptionally strong result in the first half of the 2011 financial year. Pleasingly, the result is ahead of the historic long term profit growth trend. On balance, we see this as a very good outcome that positions Data^#3 well for the full year,” Mr Grant said.

The final first half results and interim dividend will be announced on 20 February 2012.