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Dicker Data (ASX:DDR) - Chairman & CEO, David Dicker - The Market Herald
Chairman & CEO, David Dicker
Source: Dicker Data
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  • Shares in IT tech distributor Dicker Data (DDR) have slipped in afternoon trade following the release of a company trading update for the first quarter of 2021
  • The company increased net profit before tax to $19.4 million for the first three months of the year — 5.7 per cent higher than the same time period in 2020
  • However, a global computer chip shortage kept quarterly revenue slightly subdued at $447.7 million over the March quarter of 2021
  • Nevertheless, with increased profit margins over the March quarter this year, Dicker Data said its quarterly profit is a "significant achievement"
  • Dicker plans to pay a nine-cent interim dividend for the March and June quarters of the 2021 financial year — taking its full-year payout to 37.5 cents
  • Dicker said it is expecting the global chip shortage to continue for the forseeable future, but it still has a backlog of orders to fill over the coming quarters
  • Shares in Dicker Data are down over two per cent this afternoon to $9.94 each

Shares in IT tech distributor Dicker Data (DDR) have slipped in afternoon trade following the release of a company trading update for the first quarter of 2021.

The quarterly update highlighted a net profit before tax of $19.4 million for the first three months of the year, which is an increase of 5.7 per cent compared to the same time period in 2020.

The profit was driven by an uptake in demand as remote work continues to thrive in light of COVID-19 restrictions and self-isolation mandates.

As such, Dicker said the bump in quarterly profit it a "significant achievement" given the first quarter of 2020 saw profit increase by 36.3 per cent on the year before.

However, the company said revenue over the first quarter of 2021 was impacted by a global computer chip shortage, which affected the ability of some vendors to supply enough stock to keep up with demand.

The result was a 3.5 per cent fall in total revenue compared to the first quarter of 2020, with Dicker tabling $447.7 million in revenue for the first three months of 2021 compared to $463.9 million in the same time last year.

With the supply constraints and sustained demand, Dicker's profit margin was 10 per cent in the first quarter of 2020 compared to 9.7 per cent last year, hence the higher profit on the back of slightly softer revenue.

In light of all this, Dicker plans to pay a 9 cent, fully franked interim dividend to shareholders for the March and June quarters of the 2021 financial year — taking its full-year payout to 37.5 cents.

What's next?

Looking ahead, Dicker Data said it expects the global chip shortage to continue for the "foreseeable future", with manufacturers working at a global level to manage the inventory currently available.

Nevertheless, the company said it is experiencing strong demand despite the current shortage and has a baccklog of orders to fulfil. Dicker said it expects to fulfil these orders in the coming quarters.

Meanwhile, Dicker said a key catalyst for growth over the coming year will be its recent partnership with New York-listed VMware. The company expects the partnership to unlock an "entire ecosystem of market-leading technology solutions", all through VMwares vendor partnerships already in place.

Despite the company's confidence, however, Dicker Data shares are down 2.36 per cent at 3:40 pm AEST to $9.94 per share. The company has a $1.7 billion market cap.

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