New Zealand headquartered information and technology company the Datacom Group Ltd reports a solid lift in net profit before tax from NZ$40.4 million to NZ$50.9 million, up 26% for the year ending 31 March 2013.

Revenues for the Group increased from NZ$788 million last year to NZ$870 million this year, up 10%, while net profit after tax was NZ$36 million.

Datacom Group Chairman Craig Boyce says, “We are pleased to report another strong overall performance for Datacom.

At March 2013, the Group continued to show solid compound annual growth rates over 10 years with a 14% rate for revenue, this is a match on the previous year and a 9% rate for profit. These consistent results demonstrate on-going financial stability across the Group and the success of the Datacom business growth strategy.”

Geographically the revenue was divided between the New Zealand operations which turned over NZ$417 million, up 11% on the previous year, while the Australia and Asia businesses combined turned over NZ$454 million, up 10%.

Datacom operates from 23 offices in 16 cities across New Zealand, Australia and in Malaysia and the Philippines.

The profit growth was achieved with a strong lift in the Australian business, while New Zealand produced double digit growth on its bottom line.

Jonathan Ladd, Datacom Group CEO says, “We’ve made a considerable headway over the previous year due to two factors, firstly through the early adoption of new technology practices and secondly, due to our relentless commitment to deliver technology services that clearly progress the growth and efficiency aspirations of our public and private sector clients.”

The revenue uplift was driven by winning new clients and the delivery of increasingly large and complex projects in core service lines of enterprise software development, IT management, datacentres and cloud services.

Datacom completed and officially opened its Kapua data centre in Hamilton, New Zealand and extended the Orbit data centre, the Auckland located sister-facility, to a fourth data hall.

During the year Datacom Group invested NZ$51m in capital expenditure including the datacentres. Investments were also made in the acquisition of a SAP payroll business in Victoria, which gives Datacom a strengthened payroll product suite across ANZ, and the purchase of minority shares in Australia, which saw a total of NZ$66 million reinvested in business growth for the Datacom Group.

In February 2013 the New Zealand Superannuation Fund purchased 35% of the ordinary shares in Datacom Group Limited from New Zealand Post Limited. This transaction ended NZ Post’s 23 years as a stable and supportive shareholder in Datacom, NZ Post remains a significant and valued client.

The New Zealand Superannuation Fund investment in Datacom is targeted as long term and with the majority shareholder Evander Management Limited provides Datacom an on-going stable shareholding which sets the base for future growth.

At year end Datacom signed an agreement to divest its Asia based contact centre business to global BPO sector player Convergys. This deal was transacted on 30th April 2013.

Jonathan Ladd said, “This divestment of our Asia based contact centres for NZ$25 million reflects the value of this asset and will serve to strengthen our investment capacity for expansion.

We are reinvesting in the differentiators we have in our technology business. These strategic strengths are across our data centre and the cloud services that we’re developing for the NZ, Australia and Asia market from where we service customers in both Americas and Europe, as well as Asia-Pacific
Datacom has a renewed focus on our Asia Systems operations and will continue to build its leading multilingual Systems presence in Malaysia and the Philippines.”

Total staff numbers increased during the year by 14% to 4,334, with 2,202 in New Zealand, 1,082 in Australia and 1,050 in Asia. The divestment of the Asia BPO business has meant that post April 30th; Datacom’s staff numbers sit at 3660.

Highlights in summary:

  • Total operating revenue was NZ$870 million, up 10%
  • Profit before tax was NZ$50.9m, up 26%
  • Profit after tax was NZ$36 million, up 43%
  • Staff numbers up 14%
  • Capital Expenditure NZ$51 million
  • New Zealand Superannuation Fund purchased NZ Posts’ 35% stake in Datacom Group Limited and since February have purchased a further 2.3% of ordinary shares to bring in their stake to 37.3%