Datacom lifts annual profit 61%

Datacom Group has lifted annual profit 61 per cent as the next generation of services helped the country’s biggest IT services provider boost sales and fatten margins, paving the way for a bigger dividend.

Profit rose to $43.7 million in the 12 months ended March 31, from $27.2m a year earlier, the Wellingtonbased firm’s financial statements show.

Revenue rose 9.8 per cent to $1.16 billion, and gross profit of $701.5m was at a margin of 60.6 per cent, up from 59.8 per cent in 2016.

Of that revenue, 5.2 per cent, or $59.7m, was from its biggest customer, compared to 8.5 per cent, or $90m, a year earlier.

Datacom’s growth was the direct result of long-term strategic investments across a number of areas, chairman Craig Boyce said in his report. “Investments in new generations of network services has started to stimulate returns, as have public cloud transitions and transformations.”

The firm toppled Spark as the country’s biggest IT services provider in 2015, on an expanding footprint on both sides of the Tasman and last year opened four new offices to give it a bigger presence across Asia.

Boyce said Datacom’s management team was preparing for more growth across Asia.

The board declared annual dividends of $3.10 a share, or $20.4m, up from $2.30, or $15m, in 2016.

Datacom boosted its staff numbers 4.7 per cent to 4880 in the year.