Datacom Group Ltd has delivered a significant revenue increase of 6.3% to NZ$937m against last year’s $881m.

The Group profit before tax for the year is at $35.3m, below the previous year’s unusually high $64.7m. The 2013-14 period profit was boosted by the $25million divestment of the Group’s Asia contact centre business in April 2013.  And in the 2014-15 period $11.3m in operational expenditure has been invested into programmes of business enhancement and the evolution of new products and services, predominantly in Datacom’s intellectual property and vertical markets specialisation. 

Craig Boyce, Datacom Group Chairman says, “This is a sound result for Datacom. 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%.”

Jonathan Ladd, Datacom Group CEO says, “The increases in revenue and trading profit alongside our continuing investment of $11.3m operating expenditure and $30m capital expenditure reflects the Group’s balanced push for business growth”.

The New Zealand business has increased its revenue year on year with an increase of 9.2%, continuing a decade plus of consistent growth, showing notable uplift in its regional centres. The New Zealand business adds new customers on a continual basis. 

Successful delivery of data centre relocations and outsourced data centre network and systems management for Fonterra and the transition to full outsourcing and service aggregation for the New Zealand Ministry of Business, Innovation and Employment were notable as project highlights of scale.

The year saw IDC's market share analysis indicate that Datacom New Zealand is now the largest IT services provider, inclusive of business consultancy services, in the New Zealand market.

The Australia Systems business increased revenues by 6% with multiple new contracts signings indicating healthy business growth for Datacom Australia.

A highlight was Datacom being awarded the contract to supply ICT systems and support services to the Australian Government Department of Health, with an initial 5 year contract value of A$242m. This contract is a departure from traditional IT Services Outsourcing with a structure to provide an outcomes-based fully managed service, with consumption-based pricing, and a strong focus on service delivery.

Jonathan Ladd says, “This contract reflects the changing way these services are required to be delivered to customers and is a positive sign that our focus on developing highly flexible ‘As a Service’ models is the right direction for customers.”

Datacom’s New Zealand and Australia-wide data centre network continues its profitable trajectory as the business adapts to the uptake of public cloud.

Datacom’s data centre acumen was recognised this with the New Zealand Orbit and Kapua data centres being rated by the Uptime Institute (UTI) as being among the very best run data centres in the world. Both facilities were awarded the Management and Operational Stamp of Approval from the UTI, the first and to date only data centres in Australasia to have received these Stamps of Approval.

Further market recognition was achieved over the year with Datacom recognised as the first Australasian partner to pass Amazon Web Services’ Managed Services Partner audit. This progress validates Datacom’s ability to broaden its stable of AWS solutions across Australia, New Zealand, Malaysia and the Philippines.  This comes alongside the achievement of a world first when earlier in the year Datacom delivered the largest global production SAP migration to the Microsoft Azure Cloud platform for New Zealand headquartered Zespri.   

Datacom is making significant investment in programmes of work relating to the reinvention of IT service models, enhanced automation and standardisation of repeatable IT process to meet flexible service delivery needs across the hybrid environment of public and private cloud and on-premises systems. This body of effort is being matched by investment in the highest tier of cyber security and risk and data management practices. 

Jonathan Ladd says; “To continue to grow, Datacom is focused on leading the IT services evolution by delivering business-relevant outcomes to our customers in a highly flexible and rapid fashion.”

The software development business maintained its position as the largest provider of custom software development in New Zealand, and during the year won and delivered on a large number of projects.

In tandem with ongoing successful delivery of custom software projects to the public sector, growth areas of work in the Datacom software business include multiple projects in Digital Innovation and the scaling of practices in mobility and data and analytics spheres.

The expansion of our Software and Integration practice in Victoria is showing considerable potential. The unique Datacom approach to software delivery is finding favour in the Australia marketplace with new customers signed on from the insurance, state emergency services, logistics and infrastructure sectors. 

The Datacom Connect business in Australia continued growing its Federal and State government business and further work at the Australian Tax Office (ATO) in Australia.

The Datacom businesses in Kuala Lumpur and Manila had a solid year, a unique strength is the delivery to Odin where Datacom provided world-wide support and services to Odin Service Automation clients.  The Datacom Asian businesses are poised for further growth with increased demand for Datacom’s technical implementation and support services.

A significant portion of the Group’s investment has been concentrated in Datacom Solutions, which is focused on providing sector-leading IT products and services to the payroll, local government, education and healthcare sectors in Australia and New Zealand.

Under the Datacom Solutions banner, Datacom made an equity investment in Canberra-based health informatics company, SmartWard Holding Pty Ltd, and signed an exclusive licence to sell, install and support the solution across Australasia. 

The New Zealand payroll business completed an outstanding year in significantly lifting revenue, profits and payee numbers while investing heavily in new product development and establishing an operation in Australia selling the DataPay suite of products. 

In the local government business, significant product development is underway and with the establishment of an excellent support team across Australia and New Zealand, wins in local councils and the increased uptake of Datacom’s Sphere product will continue.

During the year staff numbers increased by 9% to 4,095, with 2,655 in New Zealand, 1,302 in Australia and 138 in Asia.

Key points in summary for 2014-2015 – NZ$:

  • Total operating revenue was NZ$937m, up 6.3%
  • Profit before tax was NZ$35.3m 
  • Profit after tax was NZ$24.3m
  • Staff numbers up 9% to 4,095
  • NZ$30m million capital expenditure
  • NZ$11.3m operating expenditure investment

Key points in summary for 2014-2015 – A$:

  • Total operating revenue was A$ 920.5, up 6.3%
  • Profit before tax was A$ 34.7m
  • Profit after tax was A$23.9m
  • Staff numbers up 9% to 4,095
  • A$29.5m million capital expenditure
  • A$11.1m operating expenditure investment