Dicker Data Ltd reveals profit growth of 23%

Dicker Data Ltd (ASX:DDR) just revealed quarterly profit growth of 23%.

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Dicker Data Ltd (ASX: DDR) is Australia's largest wholesaler of IT products like computers and other equipment.

Today, the company announced the results of its first quarter to 31 March 2018.

The company said that total revenue had increased by 14.4% to $319.6 million compared to March 2017. The company attributed some of this growth to recieving a full quarter of sales from new vendors which were introduced during 2017, whilst existing vendors also had a strong quarter.

Profit before tax came in at $9.2 million, which beat the company's own forecast and was 22.8% higher than last March's profit figure. Dicker Data said that the profit before tax margin increased to 2.9% from 2.7%.

Even though this was such a strong quarter, management are being conservative with their estimates and expect the first half to be in line with its internal forecast, even though the first quarter beat the forecast.

Foolish takeaway

The company has re-iterated its full-year pre-tax profit guidance of $42.5 million for 2018. If the company manages to achieve this growth then there's every chance of the current grossed-up dividend yield increasing from 8.33% to an even higher yield.

Dicker Data has delivered good total returns, but I think there are better investments out there for dividend or growth potential.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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