Sharechat Logo

Datacom FY net profit slides as revenue growth offset by higher expenses

Friday 27th July 2018

Text too small?

Datacom Group reported a 46 percent slide in net profit as stronger revenue growth was offset by higher expenses. 

New Zealand's biggest IT services provider said its net profit after tax for the year to March 31 was $23.5 million, compared to $43.7 million recorded in the 2017 annual report.  Revenue lifted 9 percent in the year to March 31 to $1.27 billion. Capital expenditure, however, increased by 53 percent over the prior year to $55.4 million and operating expenditure on major investments increased by 35 percent to $19.1 million. 

“Datacom’s long-term strategy is to reinvest much of its profit back into the business to help further grow and develop new IP, build better physical infrastructure, and enter new markets,"  a spokeperson said in response to emailed questions. "This strategy is unchanged. These investments are designed to position the company for the long term, which is reflected in Datacom’s 20 years of continuous revenue growth. Investments which have been made during 2017/2018 will likely take more than a single financial year to mature and produce results."

The company said it invested to "grow its capabilities and global footprint and support new lines of business using its own intellectual property." It opened new offices in Auckland, Adelaide, and Singapore during the year, and entered new partnership with Australian data centre provider, AirTrunk.

Staff numbers lifted 9.3 percent to 5,332. 

"We’re confident in our ability to capitalise on strategic growth areas such as cybersecurity and customer experience," said Datacom Group chief executive Greg Davidson in a statement. 

Revenue lifted 8.8 percent in Australia and Asia and 9.8 percent in New Zealand, driven by work with the Department of Home Affairs in Australia, and Auckland Airport, NZ Lotteries Commission and Vector in New Zealand. It also embarked on major new projects with existing customers such as Transport for NSW, The Department of Premier and Cabinet in Queensland, and the Accident Compensation Corp in Wellington. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

QMS pulls out A$35M from NZ unit in MediaWorks merger
Take care to avoid "unnecessary" cost in electrifying economy - Vivid
Is this the calm before a storm of credit card thrashing?
Shrinking meat and dairy product manufacturing weighs on growth outlook
Jon Macdonald to stay on as Trade Me boss through takeover tussle
Shareholders’ Association wants Finzsoft to come clean
A2 rings in more executive changes under new CEO Hrdlicka
NZ dollar dips as China-US trade tensions cast pall over global markets
No end in sight to global market turmoil
MARKET CLOSE: NZ shares rally on speculation of flat US rate track; Spark gains

IRG See IRG research reports