The Dicker Data Ltd (ASX: DDR) share price is pushing higher on Wednesday afternoon.
At the time of writing, the technology distributor’s shares are up 2.5% to $12.58.
Why is the Dicker Data share price pushing higher?
Investors have been bidding the Dicker Data share price higher following the release of the company’s first-quarter trading update just after lunch.
According to the release, for the three months ended 31 March, Dicker Data reported a 50.5% increase in revenue to $673.6 million and a 22.7% lift in profit before tax to $23.8 million.
Dicker Data’s growth was driven by a combination of organic growth and a full quarter contribution from the Exeed acquisition, which was not part of the business in the comparative period.
The release notes that Exeed contributed $90.3 million of revenue during the three months, meaning $135.6 million was organic. The latter was driven by increased demand for virtual capabilities and accelerated digital transformation of businesses across the ANZ market.
And while the company’s profits didn’t grow as quickly as its revenue due to margin pressures, management expects an improvement in the second half. This is expected to see Dicker Data’s gross margin lift from 8.6% in the first half to 9% for the full year.
Dicker Data also provided an update on its dividend plans for FY 2022. It intends to pay quarterly fully franked dividends of 13 cents per share this year, bringing its full-year dividend to 54 cents per share. This will be a 44% increase year on year.
Dicker Data’s Chairman and CEO, David Dicker, was rightfully very pleased with the company’s performance during the quarter. He commented:
The Company’s performance in Q1 was outstanding, with revenue growing by more than 50% and profit before tax growing at over 22% year on year. A result that is testament to the great people in our business. Our two recent acquisitions are almost fully integrated into the business and I’m confident that we have the foundations in place to continue delivering the growth our shareholders have come to expect.
Despite only moving into our new headquarters last year, more than doubling our warehouse capacity at the time, I’m pleased to report that we are already in the advanced planning stages for the expansion of the warehouse in Kurnell which will support the expected growth in the coming years.
The post Dicker Data share price charges higher following stellar Q1 growth appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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