Datacom Group Reports FY20 Financial Results: Revenue Growth, Reduced Capital Expenditure, Investing for the Future
Datacom Group today reported financial results for the year to 31 March 2020 (FY20). Revenue climbed to $1.34 billion,
up from $1.30 billion in the prior year (FY19).
Net profit after tax is $19 million, a decline from $40 million in FY19 as the company continues to transition to a new
operating model that positions Datacom for future growth. Net operating cash inflows of $64 million (unchanged from
FY19) remain solid.
Investment in infrastructure to grow the business continued with capital expenditure on both tangible and intangible
assets of $56 million ($67 million in FY19), demonstrating the strength of the company’s underlying financial position.
Commenting on the results, Datacom Group CEO Greg Davidson said, “The last financial year has seen Datacom invest back
into the business to set ourselves up for the next phase of growth. Over the past two years we have been focused on
repositioning ourselves as a business that has a heightened focus on customer value and market relevance and executes
across regions alongside our customers and partners.”
“One of our biggest areas of focus has been working with our customers to co-create a modern approach to delivering IT
services - one that shifts from the process-driven agreements of the last few years to agile teams, greater automation
and a lean operational core. Customers know that the pace of change in their own organisations has increased and they
want partnerships that are value focussed, more flexible and enable change when needed,” said Davidson.
“We’re now starting to realise the opportunity in Australia where we have built a sustainable business and our focus on
customers is best reflected in the renewal of a number of major contracts this past year.”
Datacom’s focus continues to be providing value and driving job creation in the markets we operate in. The company
directly employs 6500 people and as part of the response to the COVID-19 outbreak was asked to increase headcount
dramatically for a term to support the Australian government sector.
“Our ethos has been to help navigate our customers through this difficult time while maintaining jobs for our people. We
added more than 2000 roles to our Datacom customer service hub in a matter of weeks, enabling a more rapid Federal
response to the pandemic and demonstrating a capability to flex with customer demand,” said Davidson.Acceleration of digital transformation during crisis
As New Zealand moved to shut down all but essential services in an effort to limit the spread of the pandemic, Datacom
helped dozens of businesses, government agencies and community organisations with their business continuity plans to
ensure they could all serve their customers and citizens remotely.
“We worked with Youthline to ensure the organisation could continue to support New Zealand’s at-risk youth during these difficult times, and
helped Genesis Energy take one million pieces of paper out of its process, streamlining its LPG delivery business in time for the winter
demand.”
The new reality of the global pandemic also fuelled organisations to bring forward key digital projects. TSB bank deployed a major project in two weeks, something that in usual circumstances would have taken months. Datacom re-platformed TSB’s ageing customer service hub
to enable its customers to contact the bank directly online rather than rely on in-branch, face-to-face communication.Increased demand for cloud and platform services
As the market adjusts to hybrid working, remote connectivity and online presence, we’re experiencing heightened demand
in our cloud and platforms business. Customers are looking to determine what mix of cloud solutions will best help them
address their business needs securely, and unlock the value of applications like Salesforce, Dynamics 365 and Pega.
“We see a rapidly growing demand for the modernisation of systems and, as ever, the move to the cloud will help continue
to transform our customers across Australia and New Zealand in both public and commercial sectors. Whether it’s rolling
out a new website for the Australian Pharmacy Council with our partner Microsoft, or working with AWS to migrate Land
Use Victoria off a dozen disparate systems to one data centre and better manage its 700,000 annual applications and 3.4
million electronic titles, or helping Nelson City Council develop its real-time data platform to boost environmental
sustainability and enhance city services. We work with the right partners to meet our customer’s needs,” said Davidson.
Datacom’s trans-Tasman cybersecurity practice continues to grow as security incidents increase and organisations take
steps to better prepare themselves for the evolving cybersecurity landscape. A global shortage of trained cybersecurity
experts has resulted in our partnership with Unitec which aims to fill the security skills gap by offering a one-year
vocational diploma in cybersecurity, the first New Zealand-based pre-degree cybersecurity qualification.Expanding payroll operations
Datacom Payroll has also expanded its global footprint — and is focused on growth in Australia with a view to
replicating the success we’ve seen in New Zealand, where Datacom processes more than 15% of the national payroll each
week. In aggregate the payroll data is also proving to be an economic barometer of the impact from COVID-19, wage
subsidies and the increasing levels of unemployment.Implementing governance for the next phase of growth
The last year also saw Datacom’s governance move to prepare the company for its next phase of growth. On 31 March 2020
Craig Boyce retired after 20 years as director and Tony Carter was appointed to chair. Chris Day was also appointed to
director and leads the Audit Committee while Robin Keall, who has a long history with Datacom as a former CFO and
company secretary, was appointed to the board during the year. At the executive level, Alexandra Coates has stepped up
to head the Australian business and Justin Gray has recently moved to Datacom to lead New Zealand’s public sector
operation. Karl Wright, formerly Core Services leader has been promoted to the position of Chief Information Officer.
“As we face volatility in the global economy, Datacom is well positioned to support customers with our diversified
portfolio of businesses. Our underlying fundamentals are strong and we believe the company is building on the types of
services and products that the market needs at a time like this.
“Having closed out FY20 we are fully focused on ensuring FY21 builds on these strengths and opportunities.”
-ENDS-About Datacom
Datacom works with organisations and communities around the world to solve their biggest challenges, imagine new
possibilities, and help move them to a better place by connecting people and technology. Built on strong local values,
world-class technology, and experienced people who genuinely care, Datacom sets a new standard in IT services. Datacom
supports customers through a broad range of services and solutions that span technology, operations, digital and
products, all underpinned by robust industry experience and insight. With more than 6500 people working across
Australia, New Zealand, Asia, Europe and the Americas, Datacom is truly world-class in capability, and proudly local at
heart. For more information visit www.datacom.com