The Dicker Data Ltd (ASX: DDR) share price is having a difficult finish to the week.
In morning trade, the wholesale computer hardware and software distributor's shares are down 9.5% to $9.16.
Investors have been hitting the sell button in response to the company's half year results.
Dicker Data share price sinks on results release
- Gross revenue down 0.4% to $1,590.1 million
- Statutory revenue down 2.1% to $1,084.5 million
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) down 2.4% to $68.9 million
- Net profit after tax down 5.7% to $35.4 million
What happened during the half?
For the six months ended 30 June, Dicker Data reported a 0.4% decline in gross revenue to $1,590.1 million.
This was driven by a 0.7% decline in hardware and virtual services sales to $1,133.8 million, which offset a modest increase in software sales to $444.9 million. This means that the latter now represents 28% of its underlying gross sales. Management notes that software sales lifted despite the significant impact from the loss of Autodesk sole distribution in the first half, contributing a decline of approximately $58 million across the ANZ region. Services revenue declined by 4.1% to $6 million.
Dicker Data's operating expenses (excluding one-off costs) grew by $5.4 million or 6.3% over the prior corresponding period. This ultimately led to the company's net profit after tax falling 5.7% to $35.4 million. This fell short of the consensus estimate of $38 million.
Management commentary
The company's executive director and chief operating officer, Vlad Mitnovetski, is optimistic that the second half will be stronger after finishing the first half positively. He said:
We remain optimistic for the second half, particularly as we reflect on the strong growth of 8.3% in gross sales in the second quarter. Our position as the number one Australian and New Zealand distributor of Microsoft Copilot demonstrates our leadership in the Artificial Intelligence (AI) arena, as does our status as the only end-to-end NVIDIA distributor for the ANZ region, which will play a role in the Company's growth in the years to come.
And while no guidance has been provided for the second half, Mitnovetski highlights that there are a number of initiatives that are materialising. He adds:
There are several broader market initiatives that are materialising, such as the Windows 10 end of support device refresh, that are expected to bolster the Company's performance in the second half and into our FY25. Our teams are out proactively engaging with our partner communities across Australia and New Zealand to mobilise them around these initiatives and to assist them in creating new opportunities with their end-customers as we look to expand our reach and share of wallet.
