Dicker Data Ltd (ASX: DDR) shares rose 6% after releasing its FY20 third quarter update.
Dicker Data’s strong year to date
The IT distributor business announced an update for the nine months to September 2020.
It said that its total revenue, compared to the same period last year, is up by almost 15% to $1.48 billion. Profit before tax is up even more, it had grown by 28.3% to $60.8 million.
The company’s gross margins were maintained in line with the HY20 result and Dicker Data said that some operating cost leverage was achieved. Management said the business continues to prove resilient to the negative impacts of COVID-19.
Its growth earlier in the year benefited from the significant change to remote working conditions. However, Dicker Data sees growth back to a more normalised rate.
Outlook
Dicker Data said that there is an opportunity to support businesses going back to work and helping business continuity plans in a post COVID-19 environment.
The company is also seeing increasing quoting activity and the resumption of larger infrastructure projects which were previously on hold.
Dicker Data thinks 5G and its new distribution centre are two helpful longer term opportunities for the company.
Dicker Data has done really well since it listed, I’ve been impressed. I’m not sure if it’s a buy today – it has risen strongly. But its profit keeps growing and the country continues to invest in technology. So it would be a good way to ride that wave. It’s also a solid ASX dividend share. Though there are other ASX dividend shares I’d buy first such as Brickworks Limited (ASX: BKW).
