Dicker Data (DDR) H2 2024 earnings summary

Executive summary

• Gross revenue reached AUD 3.4 billion, up 2.9% year-over-year, with recurring gross software sales rising 7.5% to $895.2m, now 29% of total sales.

• EBITDA was $150.4m, flat year-over-year; net profit before tax declined 2.8% to $113.2m; net profit after tax fell 4.2% to $78.7m; EPS was 43.6 cents, down 4.4%.

• Dividend payout for FY2024 was 44 cents per share, with a continued 100% payout policy and quarterly dividends.

• The company maintained strong market share, pivoted to enterprise and retail as SMB spending declined, and saw growth in AI, cybersecurity, and data management.

• Q4 marked a return to growth across key segments, with early 2025 showing strong sales momentum.

Financial highlights

• Gross profit rose 2.7% to $324.2m, with gross margin steady at 9.5%-10% (14.2% in some reports).

• Operating costs increased 6.0%, mainly due to higher bad debt provisioning and salary costs.

• Cash at year-end was $45.8m, up from $11.6m, supported by EBITDA and additional funding.

• Total borrowings rose to $351.6m, with a debt-to-equity ratio of 1.41.

• Aggregate fully-franked FY24 dividend was 44.0 cps, down 12.2% from FY23.

Outlook and guidance

• Management expects a much stronger FY2025, with early 2025 sales growth tracking at 10% year-on-year in January and February.

• Full-year 2025 sales growth is targeted in the high single digits, with 6%-8% expected for the remainder of the first half.

• Key growth drivers include AI, Windows 10 End of Support, cybersecurity, and market convergence.

• Gross margin is expected to remain in the 9.5%-10% range, with potential upside from SMB recovery and high-margin retail and software segments.

• PBT margin guidance is around 3.5% for FY2025.