Dicker Data eyes double profit boost

Dicker Data is expecting to more than double its pre-tax profits for this financial year, following on from its April acquisition of Express Data.

The company says it expects to generate pre-tax profit of AU$30 million for FY15, up from $14.0 million for the year to 30 June, 2014 – itself a marginal increase on FY13's $13.2 million..

After one-off acquisition and integration costs of $6.5 million, the company expects to report statutory pre-tax profit of $7.5 million.

The company says its underlying pro-forma EBIT performance of the two companies, excluding one-off items and synergies, for the 12 months to 30 June 2014 is expected to be $15.6 million for Dicker Data and $13.0 million for Express Data.

Dicker Data says the Express Data figure 'equates to an acquisition multiple of 5.0x before recurring synergies and one-off integration costs, which are expected to total $9.0 million.

David Dicker, chairman and CEO of Dicker Data, says with a full quarter of operations of the combined company, the Express Data business 'is performing as expected from our due diligence'.

“The integration process with regard to site consolidation and personnel reassignment is well underway and we are working towards finalising all expected key vendor relationships.”

Dicker says significant consolidation benefits from merging the two businesses will continue to be realised in the first half of FY15, with the company expecting recurring cost savings of around $13 million per annum from the consolidations.

The cost efficiencies will come from product cross-selling opportunities and consolidation of distribution, administration and finance, among others.

Dicker says the company expects to incur further one-off costs of $2.5 million associated with those consolidations.

“However, we forecast this will generate recurring cost savings of around $13.0 million per annum, of which we expect to capture a six month contribution in FY15.”