Data#3 "very disappointed" in downbeat performance

Data#3 has reported a decline in profit and earnings for the first half of the year, blaming the result on "challenging" marketing conditions.

The reseller today reported that revenue was down 1.8 percent in the first half of the 2014 financial year to $399 million, compared with the same period the previous year. Net profit after tax was down 62 percent to $2.6 million.

Managing director John Grant said in a statement that he was "very disappointed" in the result, citing the unpredictable nature of the market.

One factor impacting the result was the slippage of some deals expected in the first half of the year, which will now be accounted for in the second half.

Data#3 isn't the only publicly listed integrator blaming client procrastination for slow sales, with Oakton citing the same problem in its half-year results.

While the company is expecting a stronger second half of the year as several customer wins bear fruit, Grant noted that it will be "very difficult" for Data#3 to achieve its original full-year target.

These wins include deals with Brisbane Airport Corporation, AstraZeneca, Worley Parsons, McInnes Wilson Lawyers and Vale Australia. "The benefit of these wins will start to flow in the second half and our pipeline remains strong albeit still taking more time than we'd like to convert," Grant said.

Data#3 chairman Richard Anderson also predicted a stronger second half. "We have a strong business, no material debt, long term customer relationships, committed supplier partnerships, and a great team."

In December, Anderson said that "delays in some customer investment decisions" meant that it had budgeted two thirds of its revenue to come in the second half of the financial year.

Today's earnings result cited a competitive market and changes in some partner incentive programs for a fall in gross margin and total gross profit. Weaker software sales in Queensland attributed to an 11.7 percent decrease in product gross profit.