Supply constraints continue for Dicker Data – ARNnet


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David Dicker (CEO and chairman, Dicker Data)

David Dicker (CEO and chairman, Dicker Data)

Credit: Dicker Data

Remember when Dicker Data broke through A$1 billion in revenue over a six-month period for the first time? Well, that accomplishment now appears to be a casually regular occurrence, with the publicly listed distributor raking in A$1.07 billion in its 2021 first half.  

The company’s latest unaudited half-yearly revenue tally represents a year-on-year increase of 6.4 per cent. Just a handful of years ago, in 2015, Dicker was trumpeting A$1 billion in revenue over a full year as a landmark achievement which, to be fair, it probably was at the time. 

Now, it clearly takes less than six months for the Australian listed distributor to make that mark, and at a time when the market is facing no small amount of turbulence, especially for peddlers of hardware.

In February, Dicker Data revealed it had cracked A$2 billion in annual revenue for the first time, despite a year of challenges thrown up by the COVID-19 pandemic.  

During the same year, the company's net operating profit before tax increased by 27.7 per cent, year-on-year, to A$81.9 million, and gross profit for the reporting period was up 20.8 per cent at A$191.4 million.

With the latest tally, Dicker looks to be on track to beat both of these figures. 

Although Dicker’s net profit numbers are yet to be finalised, it is estimated that profit before tax for the six months ending 30 June 2021 will come to approximately A$45 million, representing an estimated increase of 7.1 per cent on the previous corresponding period. 

The latest increases in earnings and revenue arrive despite continued supply chain constraints resulting from the ongoing global chip shortage. 

The results were achieved off the back of a flat first quarter and follows a very strong first half in 2020, when the company delivered revenue growth of 18.2 per cent, year-on-year.  

These gains come as Dicker Data once again warns that the global chip shortage is expected to continue for the foreseeable future as manufacturers work at a global level to manage the available inventory – and the local market is not necessarily top of the list, in terms of priorities.  

“Larger international markets, such as the US and Europe are experiencing higher allocations than many countries across the APAC [Asia Pacific] region,” Dicker Data told shareholders. “Each vendor is executing a slightly different strategy, and as proven by the company’s H12021 results, Dicker Data is extremely well placed to capitalise on the opportunities this unique market dynamic is creating. 

“Over the course of the first half of 2021 Dicker Data has been able to adapt to the changing supply chain challenges and have improved our ability to forecast and work with our vendors to secure stock allocations whilst better managing customer expectations.” 

The company also noted that, despite current shortages, it was experiencing strong demand with a backlog of orders to fulfil. As supply improves, it expects to continue to meet the demand in the second half of 2021. 

“We are also identifying significant opportunities within the technology sector as digital transformation continues to accelerate, businesses becoming digital natives and the evolving hybrid and modern workforce becoming dependent on more intelligent, faster and collaborative technology solutions,” the company said.  

As reported in March, Dicker Data has identified some big-ticket tech items that are on its radar this year. 

In its FY2020 financials, Dicker Data told shareholders that this year, it expected to see hybrid work models adopted, underpinned by 5G, as well as the acceleration of digital transformation and the evolving hybrid workforce further driving the need for smarter, faster and collaborative technology solutions, along with a greater emphasis on security.   

“As we move into 2021 and beyond, the digital transformation agendas of Australian and New Zealand businesses will continue to accelerate,” the company stated at the time. “The new hybrid working environment is driving the need for smart collaboration platforms that bridge the physical and virtual user experience.   

“Connectivity and bandwidth are top of mind for governments, businesses, schools, communities and individuals as they embrace an always-on, connect-from-anywhere approach using technologies such as 5G.   

“The everything-as-a-service (XaaS) movement is increasing commercial confidence in the adoption of technology via subscription models, which is an area that benefited many businesses throughout the pandemic as they scaled their subscription commitments to meet the changing needs of their business,” it added. 

Security, meanwhile, will also be a key area of focus for every business this year, the company said, noting that the rapid shift to remote working that occurred as lockdowns swept across the country resulted in many businesses focusing on keeping their lights on while, at the same time, their security posture, both internal and external to the organisation, fell lower down the priority list.   

This year, according to Dicker Data, will see businesses refocus on security, invest in the required technologies and ensure their corporate environments are protected against the global cyber threat landscape, which continues to evolve at pace. 

“Technologies such as zero trust will become more prevalent to protect both businesses and their employees as they connect to their corporate networks from anywhere, anytime,” Dicker Data told shareholders.   

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