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Australia - Data#3 recruitment revenue drops

23 August 2013

Australian Information and Communications Technology company Data#3 Ltd (DTL: ASX) reported revenue of AUD 639.96 million (USD 575.7 million) for the year ending 30 June 2013. Revenue fell by -7.2% from AUD 689.1 million (USD 619.9 million) for 2012. Net profit for the year fell from AUD 13.7 million (USD 12.3 million) in 2012 to AUD 12.1 million (USD 10.9 million) in 2013, a fall of -11.4%.

Data#3 provides technology solutions across Australia and Asia-Pacific, covering areas such as workforce recruitment, managed services for outsourcing, and software as a service. The firm’s People Solutions business specialises in contractor and permanent recruitment, as well as human capital performance management.

Following a difficult year in 2012, market condition in both the public and private sectors remained weak throughout the year. Strong growth in the company’s Western Australian business was offset by much flatter condition for businesses in Queensland, New South Wales, and Victoria.

Recruitment and contracting revenue fell by -13.7% from AUD 41.4 million (USD 37.2 million) in 2012 to AUD 35.7 million (USD 32.1 million) this year. Revenue for 2013 represented the second lowest level in five year, since AUD 30.7 million (USD 27.6 million) in 2010. 

The market for contract and permanent labour cycles with general economic conditions was challenging. This was exacerbated by the bias in company revenues to Queensland Government where the contraction was more marked and the scale of business outside Queensland where costs remained high relative to income. Numbers lifted toward the end of the year; overall contractor placement was down -17% and permanent placement activity was in line with 2012.

2013 saw the challenging market and the cost of investments made over the last three years impact and reduce performance. Looking forward the company predicts little change in the market in 2014. Data#3 will remain watchful for partnering and acquisition opportunities mindful of the cultural and financial issues that accompany them. The company’s overall financial objective in 2014 is to at least match the performance of 2013.

In trading today, the company’s share price fell -1.65% to AUD 1.19 (USD 1.07), an increase of +4.08% compared with a year ago. Based on its share price, the company has a current market value of AUD 153.98 million (USD 138.5 million). 

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