• Revenue: 3,104.4 - up 25%
• EBITDA: 129.8 - up 9.3%
• * Operating profit before tax: 106.9 - up 0.8%
• NPAT: 73.4 - down 0.3%
• Dividend for march was slashed down to 2.5c from 15c

In small print the operating profit before tax excluding one-off costs of 2.1m relating to hills acquisition and restructure costs.

“As a result of increased costs, in particular increased salary and finance costs. Continued disruption in the supply chain and the requirement to hold higher levels of inventory resulted in increased drawn debt throughout the year further, impacted by increasing interest rates. Additional operating costs were also incurred whilst the company was integrating the acquired Exeed and Hills businesses throughout the year.

The company has focused on consolidating and servicing the customer and vendor relationships it gained through these recent acquisitions and has yet to realised many significant cost synergies it strived for continued top line growth.”

Share price took a shellacking

Finally got the chance to read through the whole update, here's some highlights:

• Profit remained flat when compared against a massive previous period, but still considered strong by the company
• With Hills security and IT division (now the DAS), the company has returned the acquired portfolio to growth four months after taking ownership. Revenue, profitability on positive trajectory for that area of the business
• Dicker Data NZ is now fully operational from its CBD office and distribution facility
• Cybersecurity continues to be an area of growth for the company, particularly following high-profile attacks on Australian companies in recent months. Company is well positioned to assist its partner network. (nice tailwind for the DAS)
• Q4 outlook: demand strong, increased complexity driving more opportunity in partner community.
• Capital raise/warehouse expansion - has been costed up and will be complete approx end of June 2023, they expect it will come under the estimated cost. Surplus funds will be used to increase balance sheet flexibility and support long-term growth objectives.

Q3 Revenue $775.5m - +19% increase on previous comparative period

• Revenue for Sep 2022 vs Sep 2021 increased by 29.9% (2,234.9 vs 1,720.4 the previous year)
• Net operating profit before tax only increased by 0.1% (76.7m vs 76.6m the previous year)
• YTD gross profit margin finalised at 9.0%, in line with guidance.
• Overall profitability has been impacted by costs associated with rising interest rates, freight costs and increased depreciation and amortisation as a result of recent acquisitions.
• Salary costs increased on the prior corresponding period but have remained stable at 4.8% of revenue

There wasn’t much of a profit increase, but to be perfectly honest I was expecting this update to be a lot worse. I think DDR will do fine in the long term, I just expect to see a lot of not going anywhere particularly exciting in the next year.

26k director purchases, I’ve noticed this pattern whenever DDR falls in the 10-11 range. Take what you will from that

They want to increase warehouse space by 70% so they've gone to the market

• 4.9m new shares
• Shares issued at $10.30 a 10.3% discount from the $11.48 it was frozen at. Same price for institutional investors
• Up to $30,000 of shares for existing shareholders

I'm assuming this is to attempt to mitigate supply chain issues with logistics given they will probably need to hold onto stock for longer, but ouch dilution.

Dicker Data released their Interim Financial report for HY

General stuff

• Revenue $1459.4m up $390.2m - up 36.5% from FY21.
• Excluding Exeed and Hills underlying revenue grew by 16.8%
• Operating expenses increased by $19.5m - up 38.2% including 1.6m in one-off acquisition and integration costs. Largest increase in expenses was due to salary costs with staffing additions through the acquisitions: salary related expenses up $14.7m - 33.1%
• Total operating expenses slight improvement down to 4.7% from 4.8% the previous year
• The Hills acquisition, purchase price at $21.3m, brought in $18m in revenue in 2 months.
• Supply shortage forecast to continue into 2023, back order book of $393m
• Cash from operating activities down from $38.738m to $35.136m
• Profit $128m - up 28.5% from FY21
• Margin decrease from 9.3% to 8.8% due to increased freight costs, expectation of normalisation to 9% within the year.

Region breakdown

• $204.1m growth - up 20.7% in Australia.
• $186.4m in NZ - up 226.6%.

Sector breakdown

• Hardware and virtual service sales - $1085m - up 35%.
• Software sales - $365.5m - up 41.7%
• Services - $6.5m - up 34.1%

Some stuff that stood out to me

• It is looking like the acquisitions are integrating pretty quickly and giving decent chunks of revenue
• Adding Hills has given DDR the opportunity to sell cybersecurity to their existing networks
• There was a mention of contraction of perpetual software sales over transition to recurring revenue models

Disc: Held IRL and in Strawman