Data#3 shares slide despite strong First Half FY21 Results
- Data#3 records increasing revenues profits and dividend.
- The company’s cloud-based segment experienced “rapid” growth during the period.
- Data#3 shares traded 5.3 per cent lower in the first 20 minutes of the open
Data#3 (ASX: DTL) shares have opened lower today despite recording strong revenue, profit, and dividend growth for the first half of FY21. The market reaction follows a slew of Australian companies recording strong results for the six months to December but failing to meet the market's expectations. The typically volatile earnings period has become increasingly difficult to navigate for investors as companies like Data#3 report.
Data #3 is an Australian provider of cloud, data management and data analytics services allowing corporations and institutions to maximize their operational efficiency. The company has provided vital services that allow individuals to work from home and companies to manage workforces remotely. Data#3’s product and service offering are both topical and in high demand, partnering with international brands such as Microsoft to provide for their clientele.
The company’s most recent earnings report saw a 19.2 per cent increase in revenues to $856.7 million. 346.1 million of total revenues came directly from the provision of their cloud services which have become increasingly important in recent years. The Global Tech narrative has continually shifted towards cloud solutions. For Example, newly appointed Chief Executive Officer of Amazon came directly from their cloud computing department and is expected to emphasize that segment of the business.
Chief Executive Officer, Mr Laurence Baynham was, “pleased with the first-half performance, delivering another record result despite the challenging environment in changing market conditions.” He also touted strong growth in the company’s cloud-based arm of the business.
Net Profits after tax also rose 7.9 per cent to $9.4 million for the period due to decreased margins, originating from a shift in the company’s sales mix. Due to what the company described as a strong, “financial performance and strong balance sheet,” a fully franked interim dividend will be paid at 90.3 per cent of earnings. The dividend will be 5.5 cents per share and is a 7.8 per cent increase on the prior corresponding period. Data#3 will also retain a strong capital structure with no debt.
Moving forward the company is well-positioned to continually take advantage of current technology trends. They also see significant growth potential locally and believe they are on track to deliver on their full-year objectives.
As of the 18th of February 2021, Data#3 is 2.2 per cent lower in the first 1 hour of trading recovering 3.2 per cent from its lows. The company’s share price has experienced the continuation of a shallow uptrend in recent months trading almost 20 per cent lower from its all-time highs made in October 2020.