DICKER DATA LIMITED

YoY Growth in Revenues: Dicker Data Limited (ASX: DDR) ended 1H 2018 (i.e. June 30, 2018) by garnering the revenues amounting to $717.5 million which implies the YoY growth of 13.5% contributed by new vendors as well as established vendors. From the Australia region, the company has been witnessing a strong momentum while the negative momentum has been witnessed from the New Zealand region. The negative momentum was encountered because of the operations related to Cisco product in that region got ceased.


Dicker Data’s revenues, EBITDA and EBITDA margin (Source: Company Reports)

Dicker Data witnessed a rise in the cash flow which has been used in the investment activities. In 1H 2018 ended June 30, 2018, the company saw cash outlay amounting to $0.968 million while in 1H 2017 ended June 30, 2017, the outlay was of $0.615 million. This rise was witnessed on the back of the payments distributed to the suppliers so that it can avail the early settlement discounts as well as heightened deployments in the working capital.

Well-positioned for H2 2018: According to the management of Dicker Data, the demand for IOT, digital transformation, wireless technology as well as hybrid IOT is strengthening. The company is positive for the digital transformation as well as IOT because of the significant opportunities available for the company as well as for the clients. The company plans to tap these opportunities by the creation of the solutions which can cater the needs of all the market verticals. These will also help in delivering expected outcomes as well as to address the challenges. The company plans to make deployments towards the cloud platform as well as in technical capabilities. 

Technical Overview:A technical momentum indicator named relative strength index or RSI has been applied on the daily chart of Dicker Data Limited by incorporating the default values. As per the observation, 14-day RSI has rebounded from its oversold zone and is moving upwards. As a result, we maintain out “Hold” rating on the stock at the current market price of A$2.890.
 

CORPORATE TRAVEL MANAGEMENT LIMITED 

Robust Growth in EBITDA margin: Corporate Travel Management Limited (ASX: CTD) ended FY 2018 with earnings before interest, tax, depreciation and amortization or EBITDA margin of 33.7% implying a rise on the YoY basis as in the previous year it was 30.3%. This increase is attributable to integration as well as scale synergies coupled with the automation initiatives.


Regional overview (Source: Company Reports)

The company’s yield in FY 2018 stood at 7.5% which implies the marginal decline from 7.8% which was achieved in FY 2017. This marginal fall was witnessed primarily because of a rise in the larger global customers. The company’s EBITDA performance got favorably impacted by the robust organic growth. It also saw increased levels of retentions as well as client wins.

What Could Help Corporate Travel Management: According to the management, CTD has been witnessing higher client participation from the Australia and New Zealand region. The company expects that this region would remain a strong contributor to the total profit of the company.From the Asia region, the company is expected to experience strong organic EBITDA growth. The management expects it to be in double digits. Also, the acquisition of Lotus Travel would also be a contributor moving forward. From the Europe region, the management of CTD expects to experience strong EBITDA growth (double digit) because of the increased market share. Finally, from the North America region, the company is expected to witness the favorable momentum in the top line. In the same region, the company would be looking for the opportunities for the merger and acquisitions.

Technical Overview: Relative Strength Index or RSI has been applied on the daily chart of Corporate Travel Management and default values have been used. As per the observation, 14-day RSI is near its oversold zone and might soon witness a rise in its stock price. As a result, we maintain our “Hold” rating on the stock at the market price of A$28.680.

 

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