Datacom coy on 46 percent profit drop

After tax profit of $23.5m 46 percent down on the previous year

Datacom has issued its financial results for the year to 31 March 2018, bragging about its “twenty years of continuous revenue growth” and its 9.3 percent revenue growth for the year, to $1.27b, but neglecting to mention that its after tax profit of $23.5m was 46 percent down on the previous year.

The company’s profit to 31 March 2017 was $43.7m, a substantial increase on the previous year’s $27.2m.

“Datacom has more than doubled its revenue, with a compound annual growth rate (CAGR) of 8.5 percent across that period, showing the company’s durability and adaptability in a time of massive market change,” the company said.

With no mention of the profit decline there was of course no mention for the reasons behind it in CEO Greg Davidson’s statement.

"Datacom’s strategy and new organisational structure positions us well to meet current and future client needs, as well as future growth across all markets,” he said.

“We’re confident in our ability to capitalise on strategic growth areas such as cybersecurity and customer experience, and our ability to deliver high value solutions consistently to our customers." Datacom said revenue growth had been “driven by key wins such as the Department of Home Affairs in Australia, and Auckland Airport, NZ Lotteries Commission and Vector Energy in New Zealand.”

In addition to these wins, Datacom said it had “embarked on major new projects with existing customers such as Transport for NSW, The Department of Premier and Cabinet in Queensland, and the Accident Compensation Corporation (ACC) in Wellington.”

Capital expenditure increased by 53 percent over the prior year to $55.4m, and operating expenditure on major investments increased by 35 percent to $19.1m to “support the company’s strategy to grow its capabilities and global footprint, and support the creation of new lines of business and solutions utilising Datacom’s own intellectual property.”

Datacom also opened new offices in Auckland, Adelaide, Singapore and formed a new partnership with Australian data centre provider, AirTrunk.

The Datacom Systems business continued to generate the largest percentage of revenue, through projects based around IT managed services, third party products and licensing, and custom software development, the company said.

This year’s result will be the last reported under Datacom Group’s current structure. On 30 May it announced a restructure into four market-facing businesses focussed on specific geographies or sectors: Australia Commercial, New Zealand Commercial, Public Sector A/NZ, and International.

These operate alongside the group-wide Connect, Operations, and Products & Marketing businesses. The People and Finance corporate functions continue to support the group and are unchanged.

 

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