BRISBANE, Wednesday 19 February 2025: Australian business technology solutions leader Data#3 Limited (ASX: DTL) today announces its results for the half year ended 31 December 2024 (1H FY25).
1H FY25 Highlights
Commenting on the 1H FY25 result, Data#3 Managing Director and Chief Executive Officer Brad Colledge said: “We are pleased to report gross sales growth of 7.4% to $1.4 billion, and gross profit growth of 10.0% to $143.6 million for the first half of FY25. We also successfully improved overall gross margin and maintained underlying operating leverage, despite ongoing challenging economic conditions.
“Our Net Profit Before Tax (NPBT) of $32.0 million is up 4.1%, in line with guidance for the first half of $31 million to $33 million provided at the 2024 Annual General Meeting. Before $0.9 million in one-off redundancy costs incurred in the first half relating to restructuring initiatives, this represents growth in underlying NPBT of 7.0%.
“Our Services business performed strongly, with gross sales from services up 19.3% on the previous corresponding period, predominately driven by solid growth in our Managed and Maintenance Services business units which benefitted from a number of significant contract renewals and some large contract wins. Software Solutions delivered record gross sales of $975.6 million for the first half, boosted by demand for security products and cloud subscriptions. Both these high growth areas positively contributed to an increase in our recurring revenue from 67% in FY24 to 70% this half. Infrastructure Solutions gross sales declined 12.9% on the prior period, predominately impacted by ongoing delayed decision making by customers.
“Our core business remains resilient as we continue to align with our customers’ priorities, such as security, multi-cloud and connectivity, and evolve our strategy with our world-leading vendor partners.”
Our staff and customer satisfaction survey results remain strong. In addition to being recognised as an Employer of Choice and recertified as one of Australia’s best technology workplaces, the Company has been recertified as a Family Inclusive workplace.
| 1H FY25 $’000 | 1H FY241 $’000 | % Change | |
| Gross sales | 1,412,764 | 1,315,274 | +7.4% |
| IFRS adjustments | (1,021,581) | (916,398) | |
| Other revenue | 6,671 | 6,584 | |
| Total statutory revenue1 | 397,854 | 405,460 | -1.9% |
| Total gross profit (excl interest income) | 143,589 | 130,555 | +10.0% |
| Total margin on gross sales | 10.2% | 9.9% | |
| NPBT | 32,025 | 30,761 | +4.1% |
| NPAT | 22,350 | 21,421 | +4.3% |
| Return on equity | 28.5% | 29.9% | |
| Basic earnings per share | 14.43 cents | 13.85 cents | +4.2% |
| Dividend per share | 13.10 cents | 12.60 cents | +4.0% |
| Dividend payout ratio | 90.8% | 91.0% |
The directors have declared an interim fully franked dividend of 13.10 cents per share. This represents an increase of 4.0% on the previous corresponding period and a payout ratio of 90.8%.
The interim dividend will be paid on 31 March 2025, with a record date of 17 March 2025.
The group’s performance is underpinned by its leading market position, unrivalled vendor relationships, large and long-standing customer base serviced by a highly experienced and skilled Data#3 team.
Data#3 Managing Director and Chief Executive Officer Mr Colledge said: “Data#3 is well placed to continue to deliver sustainable growth in FY25. We have a growing market, pent up demand for devices based on the Windows 11 opportunity and the AI PC, and we are also seeing increased interest in multicloud solutions and AI. Our Services businesses continue to grow faster than the market with security solutions leading the way. Security solutions remain our customers’ number one priority, and demand is strong across the solutions lifecycle from consulting and procurement to adoption and management.”
“We have been actively implementing a range of strategic initiatives to mitigate the financial impact on our Software Solutions business of the Microsoft incentive changes starting 1 January 20251. We have a proven track record of adapting to changes in vendor incentive programs with speed and agility, and have already increased our focus on the Small, Medium and Corporate (SMC) customer segments and are well advanced with Cloud Solution Provider (CSP), Copilot , and security solutions, and Azure cloud migrations. The FY25 financial impact of the Microsoft incentive changes is expected to be immaterial.”
Mr Colledge said: “Consistent with previous practice, we do not intend to provide specific FY25 guidance at this stage. In line with previous years, we continue to expect a sales peak in the months of May and June, and to deliver sustainable earnings growth for our shareholders.”
The company will present a market briefing on the results starting at 10:00am (AEST) / 11:00am (AEDT) today, 19 February 2025.
The following URL will provide access to the live event, and to an archived webcast following the event:
https://webcast.openbriefing.com/dtl-hyr-2025/.
1 Change to revenue accounting policy
Effective 1 July 2023, software licensing and vendor delivered maintenance support revenues are presented on a net agency basis, with comparatives restated. This was in response to updated guidance released for software resellers in 2022 on the application of the revenue accounting standard (AASB 15) and is a statutory presentation change only. The Company will continue to measure its operational performance in terms of Gross Sales, with both Gross Sales and statutory revenue to be reported to ensure comparability with historical reporting and to align with how the company internally measures performance.
