Data#3 Limited

DTL Details
Increase in interim dividend: Data#3 Limited (ASX: DTL), a leading business technology solutions company, reported for a strong 1H FY17 financial and operational result at the back of rapidly growing cloud services market with net profit after tax (excluding minority interests) up 34.0% to $5.7 million. The group’s total revenue surged 10.6% to $506.0 million, with product revenue up 11.5% to $413.9 million and services revenue up 6.6% to $91.3 million.Total gross profit (excluding other revenue) rose 8.1% to $74.0 million while total gross margin decreased from 15.0% to 14.6% owing to shift in sales mix. There was about 1% rise in product gross profit.
 

1H FY17 Financial Performance (Source: Company Reports)
 
However, staff costs surged by 6.6% with market-based increases and headcount growth in Business Aspect consulting. DTL also increased the interim fully franked dividend to 3.35 cents per share, a 34.0% increase on the prior corresponding period. The group is positive about its full year results given the first half performance and pipeline of opportunities. We give a “Hold” recommendation at the current price of $ 1.61
 

DTL Daily Chart (Source: Thomson Reuters)

Dicker Data Limited

DDR Details
Enhancing the distribution footprint: Dicker Data Limited (ASX: DDR) recently announced that a final FY16 dividend has been declared at 4.40 cents per share. Further, total dividends to be paid in FY17 will be to 16.40 cents per share, indicative of an increase of 5.5% over FY16. The group has lately been appointed as an    authorized distributor of Seagate Technology for the Australian market. DDR has also been appointed as a distributor of the complete range of Trend Micro products for the Australian market. The group delivered a strong sales and profits result wherein revenue surged by 10% to reach $1,185 million for financial year 2016. The net profit after tax rose 25%. DTL was able to contain its costs well in FY16 wherein operating costs fell 5.6% of sales while salary expenses fell 4.5% even with new staff being added to support new vendors. For FY17, the group is forecasting revenue growth below 10% or 1.3 billion while after tax profits are forecasted to be at $28 million. This is at the back of organic growth and full year contribution from new vendors. We give a “Hold” recommendation at the current price of $ 2.45
 

DDR Daily Chart (Source: Thomson Reuters) 

Isentia Group Limited

ISD Details
Improved results from SaaS and VAS businesses in ANZ and Asia: Isentia Group Limited (ASX: ISD) released its H1 FY17 result with revenue surge of 5% year on year (yoy) to $79.6 million. Group’s EBITDA of $20.5 million was down 13% yoy while the content marketing EBITDA loss was of the order of $2 million. There was a 17% fall in the underlying NPATA of $12.4 million on a yoy basis. On the other hand, the ANZ Value-Added Services (VAS) revenue rose 15% yoy and ANZ fixed fee increased to 83% of total ANZ SaaS revenue. The growth in VAS was owing to the strong performance of Insights. Even, Asia SaaS/VAS revenue growth was of the order of 15% yoy with margins rise to 24% from 22%. This was owing to the net client churn maintained at 6% with an increase in the number of VAS clients to 419 from 381.
 

Half year Performance (Source: Company Reports)
 
Although ISD has made improvements to the content marketing business and also appointed Matt Stanton as the new CEO, the previous guidance for EBITDA breakeven for FY17 will still not be achieved. The full FY17 outlook includes mid to high single digit revenue growth and low single digit range EBITDA growth for the ANZ and Asia SaaS/VAS business, with full year FY17 EBITDA loss in content marketing. We maintain an “Expensive” recommendation at the current price of $ 1.55
 

ISD Daily Chart (Source: Thomson Reuters)

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