Datacom net profit falls

NZPA

Monday 15th August 2011

IT services provider Datacom Group reported a 26 percent fall in net profit, with the result affected by a deferred tax adjustment, and goodwill impairment and business closure costs.

Datacom, in which NZ Post has a 35 percent shareholding, said revenue for the year to March 31 rose by 8.7 percent to $725 million, while trading profit before tax and impairment charges rose 7.8 percent to $45.4 million.

Net profit before tax was $38.9m, taking into account goodwill impairment costs of $3.3m and one-off business closure costs of $3.2m. Most of those costs related to the closure of the company's Sydney-based software development business, Datacom chairman John Holdsworth said.

The fall in net profit was due to the lower pre-tax figure and an increase in the current tax charge of $4.5m as required under accounting rules in response to recent changes to tax law about deductibility of depreciation on buildings in this country.

Most of the $4.5m additional charge related to Inland Revenue's decision not to allow depreciation on Datacom's datacentres, Holdsworth said.

Revenue from overseas operations was $380m, slightly ahead of the $345m in this country. The 3371 staff numbers at year end included 1864 in New Zealand, 938 in Australia, and 569 in Asia.

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