Dicker Data share price placed on ice amid HY 2022 results and capital raise

How did Dicker Data perform for the first-half and why did it announce a capital raise?

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Key points

  • Dicker Data shares frozen at $11.48 apiece at the request of the company 
  • Dicker Data reported a solid financial performance for HY 2022, with revenue climbing 36.5% to $1.45 billion 
  • The company also announced a $50 million capital raise to fund its expansion strategy 

The Dicker Data Ltd (ASX: DDR) share price isn't going anywhere on Tuesday.

This comes after the company released its interim results for the 2022 financial year and announced a capital raise.

Currently, the technology distributor's shares are frozen at $11.48 apiece.

Dicker Data share price records growth across all financial key metrics

What happened in the first half?

For the 6 months ended 30 June, Dicker Data achieved a 36.5% increase in revenue of $1,459.4 million. The Exeed acquisition, which was completed on 6 August 2021, drove organic growth from existing and new vendors.

In Australia, total revenue lifted by 20.7% to $204.1 million, and New Zealand sales revenue jumped 226.6% to $186.4 million.

Dicker Data experienced growth across all segments, with hardware and virtual services sales at $1,085 million, up 35%. Software sales stood at $365.5 million, up 41.7%, and now represent 25% of total group revenue. Services revenue came to $6.5 million, up 34.1%, with the services business converting a number of previously deferred enterprise projects.

Operating expenses rose by $19.5 million, an increase of 38.2% on the previous corresponding period. The largest increase came from additional staff costs related to the Exeed Group acquisition and onboarding of staff transferring from the Hills SIT acquisition.

What did management say?

Dicker Data chair and CEO, David Dicker had this to say about the results:

This is another outstanding result and one that our entire team should be proud of. We continue to perform above expectations, despite the headwinds caused by supply-chain and logistical disruptions.

It is pleasing to see our recent acquisitions translating into positive results for our shareholders and I am confident that the benefit to our shareholders will continue to grow as we further bed down the operations and as these new divisions leverage the scale of the wider business.

What's the outlook?

Looking ahead, Dicker Data didn't provide any guidance for the second half of 2022 but stated that demand remains strong.

Growth is expected to continue across the company's entire product portfolio, particularly with the Hills Security and IT (SIT) division. Access to this new market segment represents a significant untapped opportunity as cybersecurity has become a focus for all sectors.

Capital raise

In addition to the results, Dicker Data advised it is undertaking a fully underwritten placement to raise $50 million.

The placement will be conducted at an issue price of $10.30 per new share, representing a 10.3% discount from the last closing price of $11.48 per share.

Approximately $30 million will be used to fund the expansion of the company's Kurnell warehouse to increase capacity by 70%. Construction is expected to commence by October 2022.

The remaining $20 million will be allocated towards working capital to provide Dicker Data with increased balance sheet flexibility.

The Dicker Data share price is anticipated to resume trading on Thursday 1 September.

Motley Fool contributor Aaron Teboneras has positions in Dicker Data Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has positions in 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 Scott Phillips.

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