Data#3 increases dividend 15% to 23 cents following record interim profit

Solid revenue growth in a challenging market

Data#3 BRISBANE, Australia – 22 February 2010 – Data#3 Limited [ASX:DTL] today declared a record interim profit with the announcement of results for the half year ended 31 December 2009. Following an increase of 17% in the after tax earnings for the first half over the previous
corresponding period, the Board of Directors of Data#3 Limited declared a fully franked interim dividend of 23 cents per share to be paid on 31 March 2010.

“Once again we are delighted to extend the run of ‘best ever’ performances to seven years. The interim dividend of 23 cents per share is a 15% increase on the previous corresponding period and, in an environment which remains challenging, again is indicative of the solid market positioning and the inherent resilience of our business. As national and global economic indicators improve we are doing all that we can to improve on the earnings result of the previous year,” commented Richard Anderson, Chairman of Data#3.

Financial Highlights

  1H 2009/10
1H 2008/09
% Change
Revenue by segment: $266,753 $190,549 +40%
Product $39,416 $38,926 +1%
Services $500 $537 -7%
Other revenue $306,669 $230,012 +33%
Total Revenue      
Revenue by area of specialisation:      
Licensing Solutions $179,859 $116,502 +54%
Infrastructure Solutions $111,028 $91,918 +21%
People Solutions $15,282 $21,055 -27%
Total gross margin $43,413 $40,017 +8.5%
EBITDA $6,803 $5,880 +16%
NPBT $6,822 $5,856 +16.5%
NPAT $4,726 $4,040 +17%
Earnings per share 30.69 cents 26.16 cents +17%
Dividend per share 23.0 cents 20.0 cents +15%

Commentary on Performance

For the company overall:

  • Total revenue grew by 33% to $306.7 million buoyed by timing changes for major software licensing contracts – underlying revenue grew 12.5%
  • The overall gross margin decreased from 17.4% to 14.2%, reflecting the larger relative proportion of lower margin revenue from licensing contracts
  • No borrowings
  • EBITDA increased by 16% to $6.8 million
  • Net profit after tax increased by 17% to $4.7 million
  • Basic earnings per share increased 17% to 30.69 cents
  • Dividends per share increased 15% to 23 cents, representing a 75% payout.

For our areas of specialisation:

  • Licensing Solutions maintained market leadership with revenue growth of 54% over the previous corresponding period to $179.8M. Adjusting for the impact of timing changes for the billing of major contracts, underlying revenue grew 9%
  • Infrastructure Solutions grew revenue 21% over the previous corresponding period to $111.0M with strong growth in project and managed services, and contract product procurement
  • People Solutions revenue declined by 27% over the previous corresponding period to $15.3M reflecting the fall in the recruitment market, however contribution to profit recovered sharply following a restructure of expenses.

Overhead expenses increased 35% over the previous corresponding period in large part due to the continued investment in improving internal operational systems and processes.

“This was a very strong result, one of the best in the sector,” said Data#3’s Managing Director John Grant. “However while most indicators point to financial conditions improving, we remain cautious and intend to provide greater clarity on our expectations for the full year as the
second half progresses.”

Media Release 22 Feb 2010 PDF

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