Dicker Data has reported a 2.9 per cent increase in gross revenue to $3.37 billion for its 2024 financial year, despite headwinds from high inflation and interest rates.
The technology distributor maintained its earnings before tax at $150.4 million, in line with the previous year, while net profit before tax declined 2.8 per cent to $113.2 million.
Dicker Data stated in its FY24 presentation that it has over 10,000 active partners in Australia, and more than 2,300 in New Zealand.
In its operational update, the company stated it faced a challenging market in the 2024 financial year, as the Australian and New Zealand markets continued to grapple with high inflation and high interest rates.
These adverse macro-economic factors were compounded by depressed levels of business and consumer confidence, meaning competitive pressures for available business increased, Dicker Data stated.
Its traditionally strong performing small and mid-market segments reduced their transactional spending as well, and Dicker Data pivoted towards enterprise accounts that were somewhat isolated from the broader economic conditions to the size and scale of the end-customer businesses they manage.
"As I said last year, the last few years have been difficult," David Dicker, chairman and chief executive of the distributor said about the FY24 results.
"We have been adversely affected by events completely out of our control," Dicker added.
He said Dicker Data may have been guilty of not adjusting as quickly as it should have, but for 2025, the distributor is fully focused on returning to solid growth for both sales and profits.
The company reported a particularly strong fourth quarter, with revenue up 9.9 per cent compared to the same period in 2023, setting what the company described as a positive tone for FY25.
Across the Tasman, Dicker Data's New Zealand operation delivered significant improvements, with gross profit margin increasing 150 basis points to 12.1 per cent, up from 10.6 per cent in the previous year.
Meanwhile, its Australian gross profit margin remained stable at 14.6 per cent.
Operating expenses increased six per cent to $182.4 million, which the company attributed to additional costs related to bad debts and increased bad debt provisioning.
Cybersecurity, data management and technologies associated with artificial intelligence deployments were identified as top performing areas, reflecting what the company called the "must-have" nature of these technologies.
Dicker Data added 12 new vendors throughout FY24, including Adobe, Hikvision and SMART Technologies, delivering an incremental $81.8 million in revenue.
Out of the existing portfolio, Dell, Lenovo, Microsoft, Cisco and HP were the top vendors for Dicker Data.
Since 2012, the proportion of the top five vendors contributing to Dicker's sales has dropped from 90 per cent, to just 42 per cent, as the distributor's portfolio has grown and become more diversified.
Looking ahead, Dicker Data stated its success in FY25 is pegged to AI, Windows 10 end of support, cybersecurity, market convergence, and helping partners drive “broader technology refreshes” to replace infrastructure deployed in 2020 and 2021.
PC refreshes triggered by upcoming end of support for Windows 10 drive some demand in FY24 but not to the levels expected by the industry, the company reported.
Windows 10 refresh motions have started in large enterprises and in heavily regulated industries, but the “broader opportunity” in the small to medium business has “lagged”.
Partners cited budget constraints, economic concerns, and a lack of understanding of the benefits of refreshing and the ramifications of not doing so.
Citing early signs of economic improvement in FY25, Dicker Data stated that its partners are “optimistic” and expect to see the refresh opportunity speed up in FY25, according to the distributor.
The company noted it has been selling artificial intelligence-enabled devices at nearly triple the expected rate, highlighting what it sees as an early-adopter mentality among Australian and New Zealand businesses.
Vlad Mitnovetski, Dicker Data's executive director and chief operating officer, expressed optimism about market conditions in 2025.
"We have commenced 2025 with an optimistic outlook, especially as macroeconomic conditions improve and market initiatives accelerate, such as the uptake of artificial intelligence and the Windows 10 end of support opportunity," Mitnovetski said.
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