DTL - Data#3 Limited

[Ves]

DTL are in a very different sector of the IT industry - take note of the large proportion of license and maintenance revenue that they receive. This is both a positive factor and a risk. Consider what happens if Microsoft decide to change their licensing models in order to increase competiveness - partners such as DTL will need to just suck it up. Also, we need to consider whether the "cloud" will be a positive or a negative for companies that focus on the Infrastructure space. If organisations increasingly decide to not have their own infrastructure but pay a fee to access someone elses, do we believe that DTL will be a winner or loser in this situation?

I think that you can add that some of the government contracts make up fairly large chunks of their product licensing revenue. The company has previously stated this, and are obviously trying to diversify their revenue stream to reduce the risk burden that this puts on their operations. Contract loss in this area would have a material impact on revenue, but not be the end of the world.

Will businesses really care whether the infrastructure sits in Australia or overseas?

In reading and listening to some presentations about this issue it would seem that consumers who are not as conscious about price would prefer to have their data hosted in Australia to avoid sovereignty issues. You can take this with a grain of salt though.

The feeling that I get is that DTL separate themselves visibly from some of the other companies in this sector by a) their excellent systems ("best practice") and b) their excellent recruiting and people management skills. The slew of awards that they have won seems to indicate that this argument isn't far from the truth. For those contracts that are not based around solely cost this seems to be giving them an advantage - take a look at the tender bids. The company themselves admit that the markets that they struggle in most are those emerging areas for the company such as WA where they do not have the same people power on the ground at this stage.

RV - can you list some of the companies that you believe directly compete with DTL? Does not matter if they are not listed.

 

[RottenValue]

RV - can you list some of the companies that you believe directly compete with DTL? Does not matter if they are not listed

I cant really help with this at the moment as my background is in the business application area and I have never paid attention to infrastructure - always viewed it as a necessary evil, like electricity and telephone bills. I intend to do my own research so will post when I am clearer on the players in the IT infrastructure space.

 

[Ves]

Hoping someone can help. I asked this on page #3 of the thread and it must have been missed.

At Note 7 of the financial statements in the 2011 Annual Report there is a line item called "employee benefits expense." I believe that this mainly has to do with employee share plans, unexercised options, long-service leave provisions and other non-cash wages etc. Can someone tell me if I am on the right track?

Is this an off-balance sheet transaction until it becomes a short-term liability that will need to be paid in the next 12 months? When does it get expensed, and more importantly where would it be shown?

 

[robusta]

Wonder what happened to DTL sp today, up over 4%??

Maybe some broker upgraded it.

 

[robusta]

Results out today, about what I expected. The market did not seem to like it however with the share price falling. I will have to read the full report and listen to the brr presentation to see if there are any hidden nasties I may have missed.

 

[Ves]

Results out today, about what I expected. The market did not seem to like it however with the share price falling. I will have to read the full report and listen to the brr presentation to see if there are any hidden nasties I may have missed.

Possible QLD government contract uncertainly - high value at risk (V-A-R).

But why speculate? It is more likely buy the rumour, sell the fact (with the result - profit upgrade).

edit: they're in a good position to win this, however with Campbell Newman on a killing spree up here, who knows what is possible.

 

[robusta]

Possible QLD government contract uncertainly - high value at risk (V-A-R).

But why speculate? It is more likely buy the rumour, sell the fact (with the result - profit upgrade).

edit: they're in a good position to win this, however with Campbell Newman on a killing spree up here, who knows what is possible.

Probably a bit overdue to hear about that contract anyway I am looking for any further weakness in price to add to my investment.

 

[rcm617]

Looks like a massive dump of 2,500,000 shares by John Grant on monday to start this drop of about 10% this week.
He must have needed the money in a hurry.

 

[PortfolioPlus]

Ves, you said:
"RV - can you list some of the companies that you believe directly compete with DTL? Does not matter if they are not listed."

Whilst they may not be go head to toe as competitors, I always compare these companies: DTL, DWS, ASZ, SMX, IFM and HSN.

Suggestion: Look at the growth in revenue, NPAT and wages as a percentage of revenue and you will see a pattern emerge. I regard DTL as the second in the field.

As an example of how shareholders get shafted by management, check out the growth of wages as a percentage of revenue over 5 years in DWS, a company which many regard as first class.

Porty

 

[Klogg]

As an example of how shareholders get shafted by management, check out the growth of wages as a percentage of revenue over 5 years in DWS, a company which many regard as first class.

Are you referring to all wages or the salary of execs within DWS?

If it's all staff in general, I'd argue that I.T. wages have gone nuts over the last 5 years, so there's good reason for that.

 

[McLovin]

Are you referring to all wages or the salary of execs within DWS?

If it's all staff in general, I'd argue that I.T. wages have gone nuts over the last 5 years, so there's good reason for that.

Yeah, I agree on this and wages generally. They won't keep rising at the rate they are, IMO. In fact it wouldn't surprise me if they spend a long time flat or even falling in real terms as the mining boom starts to unwind.

 

[Klogg]

Yeah, I agree on this and wages generally. They won't keep rising at the rate they are, IMO. In fact it wouldn't surprise me if they spend a long time flat or even falling in real terms as the mining boom starts to unwind.

Actually, I.T. wages are growing hugely in Melbourne and Sydney. I look at contract opportunities in Perth and they don't pay as well...

Although it's not widely publicised, I.T. has a huge shortage of qualified individuals (the standard of worker in I.T. is terrible from my experience) and I can't see wages flat-lining anytime soon.

For example, my current client is employing for a senior developer at 120k+super and failing to find anyone... 3-4years ago, 100k would have been enough...

 

[PortfolioPlus]

Yep appreciate that wages in IT have increased substantially...more so for some companies than others it seems. DWS is a pretty simple business model.

In FY07, staff took 58.3% of the revenue cake and the shareholders took 26.4%.

By FY12, staff were taking 72% of the revenue cake and shareholders just 16.6%

BUT...over the 5 years, the revenue cake expanded by 73.3%.

Effectively over this time, staff wages increased by 114.1% whereas the poor old shareholders only increased by 9% over the same period.

I find this hard to justify.

 

[McLovin]

Actually, I.T. wages are growing hugely in Melbourne and Sydney. I look at contract opportunities in Perth and they don't pay as well...

Give it a bit more time...

AUSTRALIANS should brace for a "white-collar recession" by early next year with the unemployment rate tipped to rise to up to 6 per cent.

The rise in unemployment is fuelled by redundancies in the financial and IT sectors handed out over the past 18 months, which experts say have so far been hidden from official unemployment figures.

A recent report by Macquarie Bank also found middle-class white-collar suburbs in major capital cities were showing increasing unemployment strain.

The Invisible Unemployment II report showed both Northern Sydney and Inner Melbourne had noticeable rises in their unemployment rates (see graph below).

The eastern suburbs of Sydney, which has the highest proportion of people employed in the finance and professional services sectors (80 per cent), is also charting a decline in employment.

“Redundancy payouts… only last for so long. Thus we suspect this pressure is likely to emerge in the second half of 2012,” the report said.

“As such, we think investors should be prepared for the unemployment rate to hit 6 per cent by early next year.

Read more: http://www.news.com.au/business/wor...rn/story-e6frfm9r-1226486009556#ixzz286rf6ba7

 

[Klogg]

Give it a bit more time...

Read more: http://www.news.com.au/business/wor...rn/story-e6frfm9r-1226486009556#ixzz286rf6ba7

Scary...

Reading that, I'm just grateful my contract has been extended until March.

 

[qldfrog]

is this surprising anyone?
I am a contractor in IT and it has been open slayer in Brisbane for the last 3 months
As for the implications for DTL, well not worse than the rest of the economy when people will stop listening to JG and opem their eyes: black clouds gathering for a hell of a storm IMHO
But might not be that bad for stockmarket as per previous experience, stocks can boom in a recession

 

[Klogg]

is this surprising anyone?
I am a contractor in IT and it has been open slayer in Brisbane for the last 3 months
As for the implications for DTL, well not worse than the rest of the economy when people will stop listening to JG and opem their eyes: black clouds gathering for a hell of a storm IMHO
But might not be that bad for stockmarket as per previous experience, stocks can boom in a recession

I guess having two of the big four banks in Melbourne, along with Telstra, any government redundancies don't really make a big impact - so I can honestly say this has surprised me when talking IT specifically.

 

[qldfrog]

, any government redundancies don't really make a big impact - so I can honestly say this has surprised me when talking IT specifically.

and crash of mining boom so what is left???

 

[robusta]

Ves, you said:
"RV - can you list some of the companies that you believe directly compete with DTL? Does not matter if they are not listed."

Whilst they may not be go head to toe as competitors, I always compare these companies: DTL, DWS, ASZ, SMX, IFM and HSN.

Suggestion: Look at the growth in revenue, NPAT and wages as a percentage of revenue and you will see a pattern emerge. I regard DTL as the second in the field.
Porty

May I ask who do you regard as number one in this field?

 

[craft]

I am a contractor in IT and it has been open slayer in Brisbane for the last 3 months
.
.
.
But might not be that bad for stockmarket as per previous experience, stocks can boom in a recession

Variable cost management