Datacom returns to profit, unveils strategic transformation plan

Datacom Group has reported its financial results for the year ended 31 March 2024, showcasing a return to profit and a strategic transformation programme set to future-proof its business. The group's revenue amounted to NZD $1.47 billion, reflecting a slight decline of 1 per cent from NZD $1.49 billion in the previous year. However, profit before tax surged to NZD $41 million, up from NZD $8 million in the prior year. Group EBITDA also saw an improvement, rising by 11 per cent to NZD $152 million.

Operating cash flow remained robust at NZD $139 million, with the company continuing to maintain low levels of debt. Datacom Group CEO, Greg Davidson, attributed the overall positive performance to renewed customer confidence in Australia, despite challenging economic conditions in New Zealand. He indicated, "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."

In New Zealand, Davidson acknowledged a reduction in spending due to market uncertainty but stated the business is poised to assist customers with balancing rising operating costs and increasing technology demands. "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," Davidson said.

Over the past year, Datacom's team of over 6,100 employees has been involved in numerous projects and initiatives, ranging from AI deployments to supporting sustainability goals and providing reliable data centre solutions. Davidson confirmed that the company has launched a strategic programme designed to streamline operations and ensure future growth. This programme includes anticipating customers' future needs, fostering opportunities for employees, developing innovative products and services, and ensuring the long-term sustainable growth of the company.

Datacom plans to establish dedicated in-market teams supported by four lines of business: Professional Services, Managed Operations, SaaS Products, and Infrastructure Products, including data centres, private cloud, networking, and security. The leadership team will expand to include Sunny Katira as Director of Professional Services, and Mark Hile as Director of Infrastructure Products. Stacey Tomasoni will become Managing Director of Managed Operations. The recent appointment of Phil Neutze as Group CFO also aligns with these strategic changes.

The forthcoming phase of the transformation programme will focus on supporting AI uptake at speed. Davidson underscored the company's commitment to leading in AI adoption, both internally and for customers. AI's potential to address cyber security, data storage, and governance challenges was emphasised. Davidson stated, "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."

Datacom has already initiated several AI and machine learning projects to enhance business processes, including in its finance division and cyber division. In its payroll business, Datapay, AI is used for anomaly detection to improve compliance and reduce payroll errors. Davidson revealed, "We have more than 20 pilots and POCs in place across our business, some internal, some external – all of which are designed to enhance user experience, drive efficiencies and optimise operations."