The Dicker Data Ltd (ASX: DDR) share price is pushing higher on Wednesday.
In morning trade, the ASX tech share is up 6% to $8.88.
Why is this ASX tech share rising today?
Investors have been bidding Dicker Dataâs shares higher today after they responded positively to the release of the computer hardware and software distributorâs first-quarter update.
According to the release, for the three months ended 31 March, Dicker Data delivered a 14.7% increase in total revenue to $772.3 million and 6.7% lift in net profit before tax to $25.4 million.
In respect to its revenue growth, management advised that this growth was driven partly by a full quarter contribution from Hills acquisition that was not in the comparative period.
The balance is attributable to organic growth from existing and new vendors and increases in other income, representing year on year organic growth of 9.7%.
One of the reasons the companyâs profits did not grow in line with revenue was its DAS business. It reported quarterly revenue of $33.4 million but has yet to deliver a profit. However, management advised that the first quarter was focused on cost rationalisation and it now expects the unit to be profitable from the second quarter.
Positively, the tech share reported an increase in its gross margin to 9.2%. This was in line with expectations and up from 8.6% a year earlier.
Dicker Data Chairman and CEO, David Dicker, commented:
We delivered a pleasing result in the first quarter of 2023, buoyed by a strong monthly revenue result in March. Revenue was up by 14.7% on the prior corresponding period and profit before tax remained strong increasing 8.8%, excluding one-off costs. We expect to see the upside of operational refinements undertaken during the first quarter within the next three to six months, putting us in a strong position to deliver on shareholder expectations in FY23.
Finally, the ASX tech share expects to continue paying out 100% of after-tax profits in FY 2023. This is expected to see three interim dividends of 10 cents per share before a final dividend in March 2024.
The post Here’s why this ASX tech share is storming 6% higher on Wednesday 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. The Motley Fool Australia has positions in and has recommended Dicker Data. 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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