Datacom enjoys increased profits as Australian business thrives

Datacom Group today reported revenue of NZ$1.47 billion in the year to 31 March, down one per cent from NZ$1.49 billion in 2023, however, profit before tax lifted to NZ$41 million, up from NZ$8 million.

Group EBITDA for the year was NZ$152 million, up 11 per cent, the company said in a press release.

While Datacom’s financial statements are usually posted to the NZ Companies Office, that has not yet happened. ARN requested and reviewed them.

Datacom said full-year operating cash flow remained strong at NZ$139 million, and the business continued 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 had a positive impact on the group’s 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,” he said

The New Zealand business saw a reduction in spending driven by market uncertainty, Davidson said. However, the business was well positioned to support customers as they balanced 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,” he said.

Davidson said the group had embarked on a programme designed to streamline and improve operations and customer engagement to set the business 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,” he said.

“We are committed to deliver for our people, our customers and our shareholders a business that is match-fit for the future. “

This included making it easier to anticipate customers’ needs, creating opportunity for Datacom’s people to do their best work, building innovative products and services and ensuring the long-term sustainable growth.

“For that to happen, we are building a new foundation for the future,” Davidson said.

Datacom is establishing dedicated teams underpinned by four lines of business to enable them to better collaborate and service customers. The four lines: professional services, managed operations, SaaS products and infrastructure products – which includes data centres, private cloud, networking and security.

Datacom’s leadership team is also 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 team, will take on the position of managing director of managed operations.

The changes complement the appointment of Phil Neutze, who joined Datacom in March as Group CFO.

“In addition to the leadership changes, we are introducing strategic roles to our in-market leadership teams on both sides of the Tasman,” Davidson said.

These roles include customer strategy and consulting, commercial service improvement and enablement and proposition development and would play a key role in leading a “refreshed” Datacom.

With AI adoption globally surpassing expectations, Davidson said the group’s focus for the coming year would 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,” he said.

“More than a decade ago we made a strategic decision to invest significantly in data centre facilities and today our four New Zaland-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 said the group was 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,” he said.

“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.”

More than 20 pilots and proofs of concept were in place across the business, some internal, some external, but all designed to enhance user experience, drive efficiencies and optimise operations.