The story about Datacom below is a clear illustration that if a company is customer focused, then the external market conditions will not stand in the way of a great performance. We are delighted that our business partner and shareholder has had another great year. The lesson that we take from their excellent showing in today’s challenging market is the need to be obsessed about giving our customers value for money. We also take a lead from Datacom in having no minimum contract periods and letting our service be the ONLY deciding factor for our customers continued use of SmartPayroll.
Datacom’s sales hit $609m (The Dominion Post) Datacom has bucked the downturn to report a 35 per cent jump in revenue to $609 million and a 9.5 per cent lift in net profit to $26.6m.
The revenue result was $30m higher than Datacom forecast in May when Prime Minister John Key opened the company’s $30m Orbit data centre in Auckland.
Staff numbers were up by 142 at 3075.
The privately-owned firm has enjoyed compound average annual revenue and profit growth of 14 per cent and 16 per cent, respectively, over the past 10 years.
New Zealand revenues grew a modest 4.5 per cent in the year to March, but sales in Australia and Asia which account for more than half of Datacom’s business were up 79 per cent.
Chairman and majority owner John Holdsworth said in a statement that the result in Australia was helped by very strong performances from new operations in South Australia and Western Australia and the full-year impact of previous acquisitions and customer wins.
The result was “very satisfactory” in a year with decreasing margins and downward pressure on spending by many customers.
New Zealand Post holds a 35 per cent stake in the firm.
Stefan Nordbruch, an analyst at research firm IDC, says Datacom’s open-exit contracts which allow customers to opt out after giving notice are attractive as they reduce risk for businesses. Datacom has also focused on providing value for money. “In the current climate that’s a benefit.”
IDC has forecast the New Zealand IT services market will be worth $3.2 billion by 2013 growing 3.8 per cent per year. It predicts the market will be worth $2.7b this year.