Datacom Group today reported its financial results for the year ended 31 March 2024 (FY24). Group revenue was $1.47 billion, down 1 percent from $1.49 billion in the prior year (FY23), while profit before tax increased to $41 million, up from $8 million in FY23. Group EBITDA for the year was $152 million, up 11% on the previous corresponding period. 

Full-year operating cash flow remains strong at $139 million, and the business continues to carry low debt levels.  

Datacom Group CEO, Greg Davidson, said despite challenging economic conditions in the New Zealand market, renewed customer confidence in stabilising market conditions in Australia has had a positive impact on the Group’s overall performance.

“Over the past year we’ve seen strong growth in our Australian operations, driven largely by significant contract wins in the public sector as government departments continue to digitise at pace.” 

Commenting on New Zealand, Davidson notes that while there was a reduction in spend driven by market uncertainty, the business is well positioned to support customers as they navigate and balance increasing operating costs against growing technology requirements and cyber security threats.

“Helping customers get as much value out of their technology investments as possible to support their own strategy delivery, whilst ensuring they aren’t cutting corners, has never been more important. Our team is committed to supporting our customers as they navigate the rapidly evolving technology landscape and helping them adopt new technology that improves processes and end user experience and protects their data from a growing number of online threats.” 

Over the past 12 months, Datacom’s team of more than 6100 has supported government and corporate customers on a wide range of projects and initiatives. This includes identifying use cases for AI deployments, helping Councils improve two-way engagement with their local communities, introducing lifecycle management initiatives to support sustainability goals and providing secure, reliable data centre solutions to help companies manage critical IT and data assets at a time where AI is powering exponential data growth.

Positioning Datacom for future growth

Davidson confirmed the Group has embarked on a strategic programme of work designed to streamline and improve operations and our customer engagement as well as ensuring the business is set up for future growth. 

“We have been operating for nearly 60 years and the ability to evolve and adapt our business to meet the changing needs of our customers has been critical to our success.  

“We are committed to deliver for our people, our customers and our shareholders a business that is match-fit for the future. This includes making it easier to anticipate our customers’ future needs, creating opportunity for our people to do their best work, building innovative products and services, and ensuring the long-term sustainable growth of Datacom. For that to happen, we are building a new foundation for the future,” Davidson says.

Over the coming six months, Datacom Group will establish dedicated teams in-market which will be underpinned by four lines of business to enable them to better collaborate and better service customers. These four lines of business are: Professional Services, Managed Operations, SaaS Products, and Infrastructure Products – which includes data centres, private cloud, networking and security.  

Leadership team expansion

As part of this programme of work, Datacom Group’s Leadership Team (GLT) is expanding to include Director of Professional Services, Sunny Katira, and Mark Hile, who will take on the role of Director of Infrastructure Products. Stacey Tomasoni, who currently sits on the GLT, will take on the position of Managing Director of Managed Operations. These changes complement the appointment of Phil Neutze, who joined Datacom in March as Group CFO.

“In addition to the GLT changes, we are introducing strategic roles to our in-market leadership teams on both sides of the Tasman. These roles include Customer Strategy and Consulting, Commercial Service Improvement and Enablement and Proposition Development to name just a few and will play a key role in leading a renewed and refreshed Datacom into the future – one that is focused on our customer, with the local expertise our customers have come to expect.” 

Davidson has confirmed the programme of change is entering its second phase over the coming months, with all teams set to be confirmed by the second half of the year.

The year ahead – supporting AI uptake at speed

With AI adoption globally surpassing expectations, Davidson notes the Group’s focus for the coming year will be to not only continue implementing AI into its own operations, but to take a leadership role in identifying opportunities and potential pain points when it comes to effective implementation of AI across New Zealand and Australia, including cyber security, data storage and governance. 

“We know there is huge opportunity around AI – for our business, our customers, and the economy. More than a decade ago we made a strategic decision to invest significantly in data centre facilities and today our four New Zealand-based data centres, which operate on renewable energy, are well placed to cater for the surge in AI data requirements.  

“When it comes to AI adoption, ensuring we get it right is critical, as is upskilling the workforce so that we can bring our people and our customers along on the journey.”

Davidson notes Datacom Group is also well down the path of implementing and exploring AI and identifying use cases to enhance business operations and processes, including in its finance division, cyber division, SaaS products and customer delivery teams. 

“In our payroll business, Datapay, we’re using AI and machine learning for anomaly detection to improve payroll compliance and leave calculations and reduce the impact of common payroll errors. We recently launched a new Payroll Assistant which helps trained payroll professionals do their jobs efficiently by providing safe, intelligent access to the full body of payroll regulations. 

“We have more than 20 pilots and POCs in place across our business, some internal, some external – all of which are designed to enhance user experience, drive efficiencies and optimise operations. Many of these are commercially sensitive but once out of the pilot phase we look forward to sharing more on our experience with the market in the hope it will prompt more of the organisations that are ‘on the fence’ to identify AI uses cases that make sense for their business.” 

Datacom quick facts:

  • Revenue: $1.47 billion 

  • Profit before tax: $41 million (NPAT $34 million)

  • Operating cash flow: $139 million 

  • Capital expenditure: $91 million 

  • Staff: 6131 FTE employees (as of 31 March 2024) 

  • 26 locations throughout the regions including four data centres

  • #3 TIN export ranking.

All financial figures are in New Zealand dollars.

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