Shares of electronics wholesaler Dicker Data Ltd (ASX: DDR) are trading flat today despite announcing pleasing FY20 results to the market.
Since listing on the ASX in 2011, Dicker Data shares have delivered a capital gain of 4,283% and the company has maintained a 100% dividend payout policy.
DDR share price chart
What did Dicker Data report?
Dicket Data finished FY20 on a high note, with total revenues reaching the $2 billion mark, an increase of 13.6% on the prior corresponding period (pcp).
The company recorded a net profit after tax (NPAT) of $57 million, which was fully paid out to shareholders as dividends.
Dicker Data added eight new vendors across the period, which led to incremental revenue growth of $9.8 million, while existing vendor business grew $230 million, up 13.1%.
The business continues to scale well as it expands, as evidenced by increases in both gross profit and gross profit margins, which were up 20.8% and 6%, respectively, across the period.
At a sector level, the company delivered 13% revenue growth in hardware and support, while software sales grew by 16% to $66.8 million. Within the software business, the strongest growth came from recurring revenue products, which increased by 19% to $366.5 million.
On a cash flow basis, the company reported cash flow from operating activities of $59.4 million, an increase of $47.8 million.
Dicker Data finished the year with $30 million cash on its books and $120 million in debt.
The company declared a final dividend 10.5 cents per share earlier in the month, taking the total dividends paid for FY20 to 35.5 cents, fully franked. This translates to a current dividend yield of around 3.2%, or 4.6% grossed-up.
Management commentary
Commenting on the results, chief executive David Dicker said: “Again, we have had a record year compared to the previous one and the one before that, etc, etc. However last year was a significant result, not so much because we excelled, but because we achieved that excellence under very difficult conditions.”
Future outlook
Dicker Data anticipates another strong year ahead which will be partly driven by an accelerated digital transformation and an increased need for faster and more collaborative technology solutions.
Cybersecurity is expected to be another driver behind the continued growth trajectory. Automation, machine learning and data capture tools will all play key roles as businesses and governments continue to prioritise more efficient operations. Dicker Data has said that the increased demand for devices in 2020 is set to continue this year.
An additional catalyst over 2021 will be Dicker Data’s most recent partnership with VMware (NYSE: VMW), which will expand the current ecosystem of new technologies through a large number of VMware’s technology alliance vendors.
