The Dicker Data Ltd (ASX: DDR) share price is rocketing higher today after the company announced its final dividend for FY19.
A dividend of 13 cents per share was declared, fully franked. This brings the total dividend for FY19 to 33 cents per share, up 12.8 cents per share or 63.4% from FY18.
The increase is partly attributable to a special interim dividend paid for the realised profits on the sale of a building at 230 Captain Cook Drive, Kurnell.
The record date for the final dividend will be Friday 14 February 2020 with the payment date on Monday 2 March 2020.
Sale of distribution centre
Dicker Data announced the sale of the property, which was used as a distribution centre, in August. Total consideration on the sale was $36 million, with just over $12 million in profit realised.
The business will continue to operate out of the location while its new custom-designed distribution centre is built next door. Dicker Data has signed a 2 year lease with the new owners with the option to extend if required.
The new distribution centre, which will cost $55 million to build, is nearly double the size of the existing distribution Centre at 29,000 sqm, compared to the current 15,000 sqm.
Appointment as Veeam distributor
In January, Dicker Data announced its appointment as the Australian distributor of Veeam. Veeam provides backup solutions for cloud data management. The new distribution agreement, which was effective on January 21, 2020, provides Dicker Data with access to the Veeam product portfolio.
Veeam is a strategically important appointment for Dicker Data, as it enables the company to offer new solutions built on existing and new vendor partners in the small and medium business and mid-market customer segments.
Chairman and CEO David Dicker said, “we currently have successful distribution practices in place with a number of Veeam’s technology alliance partners such as Cisco, Dell Technologies, Hewlett Packard Enterprise, Lenovo, Microsoft, Nutanix, and Pure Storage. These practices will be leveraged to accelerate the uptake of Veeam by our extensive reseller partner base.”
Dicker Data business
Dicker Data is a technology distributor that sells to a base of more than 5,500 resellers. The company is a strong distributor to the mid-market and small and medium businesses, with approximately 80% of revenue coming from these sources.
The distributor is yet to release its results for the December quarter. However, revenue for the 9 months to September 2019 was up 17.8% year on year to $1.29 billion. Operating profit before tax was $47.4 million, up 38.6% over the prior corresponding period.
Full year operating profit before tax is expected to be over $60 million in FY19. Dicker Data’s full-year FY19 results are anticipated later this month.
At the time of writing, the Dicker Data share price is up 5.71% with shares last trading at $7.03.
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Motley Fool contributor Kate O'Brien 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.