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Dicker Data share price falls despite exceeding FY19 guidance

The Dicker Data Ltd (ASX: DDR) share price is falling today despite releasing a strong set of full-year FY19 results.

After slumping as much as 9.92% lower in early trade, Dicker Data shares are now trading 4.96% lower for the day at $5.94. This comes as the S&P/ASX 200 Index (INDEXASX: XJO) is down by 3.30% as global markets were hit overnight on coronavirus concerns.

Dicker Data is an Australian wholesale distributor of computer hardware, software and related products.

Strong growth in revenues

Dicker reported strong revenue and earnings growth which exceeded its upgraded guidance provided to the market back in October last year.

The company reported revenues from ordinary activities of $1,761 million, a significant 17.9% increase on the 12 months in the prior year. This solid result was driven by impressive growth in recurring software revenue of 47.9%, to come in at $366.5 million.

At a geographic level, the company noted Australia grew revenues at 16.8%, while New Zealand grew revenues at 38.4%.

Dicker Data added 15 new vendors during the FY18 and FY19, which accounted for incremental revenue of $29.9 million in FY19.

Strong profit growth

Net profit before tax also grew strongly for Dicker Data, up 64.2% to reach $75.8 million. Net profit after tax (NPAT) for the period increased by 67.3% to $54.3 million.

Meanwhile, net operating profit before tax came in at $64.1 million, up by 37.5%. The company noted, however, that the operating profit result excluded profit on sale of property of $12.2 million, as well as employee share scheme costs totaling $450,000.

Update on distribution centre sale

As previously reported, the company sold its distribution centre in Kurnell last August for $36 million. Dicker Data has entered into a 2-year lease with the new owners, and there is an option to extend the lease if required.

The company noted that it will continue to operate out of this location whilst it builds its new distribution centre next door.

Significant dividend increase

The company previously declared a final dividend earlier this month of 13.0 cents per share to be paid on 2 March 2020.

This takes total FY19 dividends to 33 cents per share (including a 5 cent special dividend last year), representing dividend growth of 63.4% on FY18. This dividend payout follows the company’s strong profit growth, and was also in line with its dividend policy to pay out 100% of after-tax profits.

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Motley Fool contributor Phil Harpur 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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