The company is progressing in-line with forecasts given at the time of the FIIG-led origination, and is ahead of its own forecasts
Dicker Data (DDR) has released a presentation
summarising its performance during 1H15 to 30 June.
Source: Dicker Data
Revenues have grown 6.2% over the previous half and underlying EBITDA was $22.1m. Given DDR is a high volume low margin business efficiency is very important. DDR historically has targeted a 2.5% profit before tax margin and an 8.0-8.5% gross margin. Recently acquired Express Data’s gross margins have varied between 8-9% over the last four years however its profitability is lower.
Since the acquisition of Express, the company has been able to recognise synergies and benefit from increased scale to improve efficiency. Gross margin has increased from 8.4% to 9.7% over the full year and the profit before tax margin improved from 2.1% to 3.1%. DDR’s efficiency continues to be stronger than key competitors in the region and is a strength of the business.
FY15 Forecast
DDR has previously provided NPBT guidance for FY15 of $30.9m which was confirmed in the release. The following figure provides an illustration of the bridge to the full year forecast.
Source: Dicker Data
The target is expected to be reached through a combination of cost synergies, incremental contributions from acquisition, further costs savings and general growth.
The company’s increased scale has led to growth in business from existing vendors and well as new distributer agreements. The newly acquired New Zealand business continues to grow organically and will benefit from DDR’s first volume vendors agreements executed from April 15, starting with Toshiba, Kingston and subsequently Motion.