Datacom annual profit halves after year earlier gain as asset sale washes through

Tuesday 18th August 2015

Datacom, the privately-held IT services firm, reported a 53 percent drop in annual profit as a one-off gain from the sale of its Asian call centres washed through the company's accounts.

Net profit fell to $24.3 million in the 12 months ended June 30 from $54.1 million a year earlier, the Wellington based company said in a statement. The 2014 profit was boosted by a $25 million gain on the sale of Datacom's Asian contact centre in April 2013. Revenue rose 6.3 percent to $937 million as Datacom expanded its grip on the domestic market, and added new Australian business, including a A$242 million five-year contract with Australia's federal Department of Health.

"This is a sound result for Datacom," chairman Craig Boyce said. "The executive team is delivering on a progressive and sustainable business strategy and we are pleased with the solid overall performance and strong revenue growth, which maintains the 10-year compound annual growth rate for revenue at 11.2 percent."

Datacom employs 4,095 people across New Zealand, Australia, Malaysia and the Philippines, providing software engineering, payroll, and IT services.

The company is controlled by former chairman and NBR Rich Lister, John Holdsworth, with the New Zealand Superannuation Fund owning about 38 percent.

Datacom spent $30 million on capital expenditure in the year, and said it is investing in IT service models, greater automation for repeatable processes, cyber security, and risk and data management.

The company said a "significant portion" of group investment had been poured into its Datacom Solutions payroll unit.

BusinessDesk.co.nz

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