Data#3 share price dips despite 19% leap in FY22 dividend

The ASX tech share said ongoing supply chain issues had impacted its performance over the year.

| More on:
A man sits in casual clothes in front of a computer amid graphic images of data superimposed on the image, as though he is engaged in IT or hacking activities.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Data#3 share price is trading lower after releasing its full-year results for FY22
  • NPAT increased 19% from the prior year
  • The company expects to deliver sustainable earnings growth for FY23

The Data#3 Limited (ASX: DTL) share price is down 1.16% in early trade today.

Most tech shares have been selling off this morning, as witnessed by the 1.9% drop in the S&P/ASX All Technology Index (ASX: XTX).

Data#3 shares closed yesterday trading for $6.45 and are currently trading for $6.38.

This follows the release of the information technology services company's results for the financial year ending 30 June (FY22).

Data#3 share price dips despite rising profits

What else happened during the year?

Data#3's strong revenue growth over FY22 was spurred by a 31.3% leap in its public cloud revenue, which reached $1.0 billion as large companies and government agencies picked up the pace to migrate to cloud-based infrastructure.

The NPAT result was in line with guidance the company provided in July.

Data#3 advised its performance was impacted throughout FY22 by extensive product delivery delays due to ongoing supply chain issues. It ended the year with a "significant backlog of orders" yet to be invoiced as at 30 June.

How significant?

According to Data#3, at least $6 million of pre-tax profit associated with the backlog should be realised in FY23. That's twice the amount of backorder the company had on its books at the end of FY21.

The company said it was "well-positioned" to manage ongoing supply chain disruptions expected in the current year, yet those looming disruptions may put some pressure on the Data#3 share price today.

What did management say?

Commenting on the results, Data# 3 chairman Richard Anderson said:

We are pleased to deliver another record result, underpinned by our leading market position built up over 45 years, the strength of our supplier relationships and customer base, and our exceptional team.

In line with our strategy, it reflects the growing contribution from our higher-value services offerings, demonstrating the growing demand for our solutions especially for large infrastructure and digital transformation projects.

The result would have been even stronger were it not for a significant order backlog as global supply chain delays persist, although this gives us a fast start to FY23.

What's next?

Looking ahead, Data# 3 CEO Laurence Baynham said, "We continue to experience a steady increase in the pipeline of large integration project opportunities across our corporate and public sector customers, and our services growth strategy will improve our overall margin profile while complementing our growing software and infrastructure business units."

Baynham also cited the $6 million of FY22 orders that have yet to be delivered or invoiced.

"The backlog from FY22 has again provided a fast start to the current year, and we are well-positioned to capitalise on opportunities this provides," he said.

Data#3 expects to deliver "sustainable earnings growth" for FY23.

Data#3 share price snapshot

The Data#3 share price is up 7% in 2022. That compares to a year-to-date loss of 7% posted by the All Ordinaries Index (ASX: XAO).

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

Hand of a woman carrying a bag of money, representing the concept of saving money or earning dividends.
Earnings Results

Which ASX shares delivered the biggest profit jumps of the earnings season?

These companies revealed at least a 70% profit boost in their latest earnings reports.

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Earnings Results

Why this ASX 300 share is leaping 14% despite being branded a 'sell'

Falling profits are putting investors off the fund manager.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Technology Shares

Life360 share price rockets 24% after smashing FY23 earnings expectations

This tech stock delivered a very strong result this morning. How strong was it?

Read more »

a man in a shirt and tie holds his chin in thoughtful contemplation and looks skywards as if thinking about something while a graphic of a road with many ups and downs unfurls behind him.
Earnings Results

What's with the Neuren Pharmaceuticals share price today?

The full market reaction to the Daybue developer's FY23 earnings report won't be seen until tomorrow.

Read more »

Two workers at an oil rig discuss operations.
Earnings Results

2 ASX energy shares going gangbusters on today's earnings results

The ASX energy shares are drawing investor interest today after releasing their half-year earnings results.

Read more »

Man pointing at a blue rising share price graph.
Earnings Results

This ASX 300 stock just jumped 12%! Here's why

The ASX 300 stock is impressing investors with its half-year earnings results.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Earnings Results

Mesoblast share price tumbles on US$32.5m half-year loss

This biotech continues to burn cash.

Read more »

Man and woman sitting at casino table playing poker
Earnings Results

Star Entertainment share price jumps 5% on strengthening outlook

ASX 200 investors are bidding up the Star Entertainment share price on Thursday.

Read more »