Dicker Data (ASX:DDR) share price uninspired by first quarter results

The Dicker Data Ltd (ASX: DDR) share price is uninspired today following the wholesale distributor’s latest quarterly results.

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The Dicker Data Ltd (ASX: DDR) share price is slipping lower this afternoon after the wholesale distributor released its results for Q1 FY21.

At the time of writing, shares are swapping hands for $10.11, 0.69% lower for the day.

Hard to beat

Investors are putting some selling pressure on the computer hardware and software distributor today. The reason is likely related to the company’s decline in revenue compared to the same period last year.

Total revenue for the quarter slipped 3.5% to $447.7 million. Dicker Data quickly pointed out the high bar set by the March quarter last year. This was due to a surge in demand for computer-related products as work shifted to the home. 

Furthermore, revenues were hindered by the ongoing global chip shortage. This shortage inhibited vendors from supplying the necessary volume of stock to meet demand.

The constrained supply wasn’t all bad news for the company. Sustained demand meant Dicker Data could charge higher prices, aiding in an elevated gross profit margin of 10%. Consequently, profit before tax increased 5.7% to $19.4 million for the period.

Backlogs and dividends

Dicker Data expects global chip shortages to continue for the foreseeable future. Unfortunately for Aussies, the United States and Europe are receiving higher allocations than many countries across the Asia Pacific.

Although, the company stated it is leveraging its supply chain to meet current and growing market demand. As such, a large backlog of orders is expected to be fulfilled over the coming quarters.

In regard to dividends, the company has retained its current policy of paying quarterly dividends. The proposed rate for interim dividends for FY21 will be 9 cents per share fully franked — coming to 37.5 cents per share for the full year. That would mean an increase of 5.6% on FY20’s paid dividends.

Dicker Data share price outperforms

There is clearly a mix of headwinds and tailwinds ahead for Dicker Data. But looking to the past, the company managed to substantially outperform during the last year. 

While the S&P/ASX 200 Index (ASX: XJO) has bagged investors a tidy 31.5% return before dividends, Dicker Data has pulled 46.3%. 

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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