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Dicker Data drastically reduces headcount

Dicker Data has cut 110 staff from its combined headcount since acquiring Express Data in April 2014 – with redundancies accounting for the majority of $4 million in restructure costs.

The figures are revealed in Dicker Data’s Preliminary Final Report for the year ended 31 December 2014.

Pre-acquisition Dicker Data had a headcount of 100 staff. Following the acquisition of Express Data headcount increased to 460 staff.

“During the last nine months there has been a progressive reduction in headcount, with gradual redundancies associated with a duplication of functions,” Dicker Data’s report notes.

“Current headcount across Australia and New Zealand is 350.

“During the six month period to 31 December 2014 we incurred additional one-off non-recurring restructure costs of approximately $4 million.”

A further $500,000 in redundancy costs was incurred in January.

No details about where the headcount cuts were made were available.

The report says revenue for the consolidated entity for the six months to 31 December 2014 was $498.3 million – up 121.8% on Dicker Data’s figures for the same period the previous year.

Gross profit for the six months was $45 million, up from $18 million the previous year while underlying EBITDA of AU$16 million was reported for the period.

Dicker Data has changed its financial year, resulting in a shortened reporting period for this lot of results.

Revenue from the newly acquired vendors is around $246 million, predominantly from Cisco, software and retail business units.

Revenue from Dicker Data’s vendors, as opposed to that contributed by Express Data, finalised at $252 million, up $28 million year-on-year.

The HP group, Dicker Data’s largest vendor pre-acquisition, contributed $139 million, up $7 million largely due to continued growth in the printing portfolio.  Declines were seen by the HP server and storage product lines, which saw revenue drop $3 million, following the appointment of a second major distributor.

The distributor saw increased revenue in its volume group of vendors, with Lenovo market share increasing and revenue up $4 million, helping to offset declines on Sony and Samsung, which withdrew from the PC market.

Dicker Data says it anticipates growth in the volume vendor business unit for the FY15 financial year following the addition of new vendors to the portfolio.

The appointment in Feb 2014 of Dicker Data as a Microsoft Authorised Distributor of OEM and full packaged products, together with the Microsoft open licensing business ‘coming on board from Express Data’ gave the distributor more than $27 million uplift in period compared to the previous year.

The company has projected to achieve AU$1 billion in annual revenue for a full financial year.