Dicker Data has recorded significant growth in part attributed to the underlying business but largely driven by the major acquisition of Express Data
Dicker Data (DDR) has posted FY15 figures in line with guidance recording significant growth driven by the major acquisition of Express Data as well as in the underlying business. Efficiency continues to improve as represented by improved margins which are stronger than major competitors in the region – a key strength for a high volume, low margin business. The $45.5m share issue during 2H15 reduced debt and increased equity resulting in improved credit metrics.
DDR’s floating rate BBSW+4.40% March 2020 note is currently indicatively offered at $100.10 (438bps over) and appears attractive given the strong performance and improved credit metrics of the group. The bond is currently only available to wholesale clients, however will ‘season’ and become retail eligible on 26 March 2016.
| FYE 30 Dec ($m) | FY15 | FY14 |
| Total revenue | 1,007.6 | 935.5 |
| EBITDA (underlying) | 42.6 | 25.3 |
| NPAT | 20.5 | 3.0 |
| Net debt / EBITDA | 2.6x | 4.5x |
| Debt / (Debt+Equity) | 64.1% | 84.9% |
Source: Company reports
- Revenue increased 15.1% to $1.07bn on the acquisition of Express Data (ED) as well as underlying growth in the business. Revenue from vendors retained as part of the ED acquisition grew 33% while existing pre-acquisition vendors grew 6.4% over the previous corresponding period. A total of 11 new vendors were on-boarded during 2015 and contributed an incremental $16.9m in revenue
- DDR continues to benefit from synergies and increased scale. As a proportion of sales, operating costs fell to 5.9% (FY14: 6.1%), with salary related expenses remaining stable at 4.6% of sales, and other operating expenses falling to 1.3% of sales
- In FY15, integration and restructuring costs incurred totalled $2.2m, made up largely of redundancy costs. In the prior period there was $10.5m in share acquisition, integration and restructuring costs relating to the Express Data acquisition
- Net Profit after tax increased to $20.4m in FY15 from $3.0m in FY14
- Equity increased by $21.7m to $71.8m during the period supported by the $45.5m share issue
- The equity raising improved gearing to 64.1% from 84.9% (debt/debt+equity)
- Liquidity is good and supported by the renewal in November of the Westpac receivable purchase facility for a further two years.The facility is drawn to $90m at FY15 against a $120m limit. Cash on balance sheet totalled $15.8m at FY15
- In October 2015, the company exchanged conditional contracts on the purchase of 17.2 hectares of land adjacent to the current warehouse facility in Kurnell NSW for $18m excluding GST. The property provides usable land four times greater than the current holding and is intended to be developed to support DDR’s growth. The purchase will be funded by debt via the receivables facility however the current property which has a valuation of $25m will be sold and leased back during the construction period. So, while gearing will weaken in the medium term as the debt funded purchase is completed, the overall net effect after the sale of the existing premises is expected to be minimal in relation to the group’s earning/cash generation