Dicker defies downturn to post record profit

Publicly listed distie Dicker Data notched up an 11.7% increase in net profit after tax for the full-year.

The company has battled against a tough market to keep its revenue decline to just 1% – a $4 million fall from $455 million in 2012 to $451 million in the 12 months to 30 June 2013.

The company said that a "downturn in PC sales in SMB sectors" hit revenues at key vendors HP and Toshiba. However, this was "significantly offset" by an increase in revenue from Lenovo, which only came onboard in June 2012.

Dicker Data expects to see a better return from HP in the next financial year following the addition of the vendor's printing and suppliers product set.

According to the results for the 12 months to 30 June 2013, Lenovo led Dicker Data to "strong education orders in second half of FY13, resulting in an increase in year-on-year revenue for the second half".

Chief executive David Dicker told CRN this morning: "Lenovo has be able to make headway against HP with market share. As they make headway in market share, it will reflect in our sales. We operate across the whole market, we have Lenovo and HP, so our results with those vendors will broadly reflect their own results."

[Related: Solid outlook for Dicker Data]

Other drivers of the improved results were Dicker Data's increased capacity and improved logistics capability, including the $3.4 million it spent on a 5,000sqm extension to its warehouse in Kurnell, Sydney.

Close attention to vendor rebates to meet buying and sell-through targets helped the gross profit of $37.4 million, a 12.9% increase from 2012's $33.1 million.

Next year will see an increased focus on data centre and cloud services, "which is anticipated will result in higher infrastructure, service and annuity revenues".

Dicker said that while the company was happy to get involved in cloud, he still saw traditional hardware distribution as the name of the game.

"The computer industry is one of the largest markets in the world. There is an awful lot of hardware despite the talk about the decline and someone has to get that hardware to the customers. That's not going to change.

"Think about the 15 million iPhones that Apple sold last quarter – or whatever it was – they have to get those devices into the hands of the customer and that will not change. There is still always room for distribution," said Dicker.