Dicker Data a virus winner as data use surges

David Dicker is stuck in New Zealand but his Dicker Data is booming during the coronavirus shut down

David Dicker says it is time for the borders between Australia and New Zealand to reopen. Picture: Sam Mooy

Though he laments being stuck in New Zealand getting a “three-month free trial of communism” away from his family, COVID-19 has at least been good for David Dicker’s business.

Dicker is the executive chairman and founder of computer hardware, software and cloud distributor Dicker Data, a quiet success story on the ASX four decades in the making.

Some of that may be to do with Dicker’s unconventional style, but those that have invested in the firm have seen his methods pay off. Dicker Data shares are up more than 30 per cent in a year, March was a record month in revenue terms and April sales were up about 37 per cent from the same period a year earlier.

Dicker’s large stake in Dicker Data propelled him on to The List — Australia’s Richest 250 when it was published in late March with estimated wealth of $501m. It is a valuation that has held up during the pandemic after an initial dip along with most other stocks in mid-March, with Dicker Data shares hitting an all-time record of $8.73 in early June. The company’s market capitalisation now hovers around $1.2bn.

The main reason for its most recent success has been the sudden shift to remote working for a huge chunk of the workforce, forcing many companies to order more computers and associated hardware for their staff.

Dicker Data has thrived during the shutdown, distributing technology and products of big global names like Cisco, Dell, HP and Lenovo. Many of those deals are as a result of long-term relationships going most of the way back in the company’s history, which have been carefully maintained along the way.

“Business success is about getting an edge,” Dicker says. “And you won’t do that by doing everything the conventional way. Investors want an outsize return, but then they want you to be like every other company.”

Unconventional strategies include being both chairman and chief executive, a rarity for an ASX-listed company in times of stricter corporate governance rules. Dicker and ex-wife Fiona Brown also hold about 70 per cent of Dicker Data stock, though a recent $55m equity raising has helped increase liquidity.

Management wise, there is Dicker’s habit of setting targets and, when they’re achieved, being satisfied. It doesn’t mean the continued pursuit of profit or sales for the sake of them. If targets are hit, then the job is done. But those targets also mean being better than the competition.

Business is booming

Dicker gives his executives and staff the responsibility of getting on with it. He also pays well, hoping a mixture of reward and responsibility will keep the company growing.

It is a strategy that has seen Dicker Data steadily achieve success since Dicker established the business in 1978. It started distributing Toshiba products in the 1980s, Compaq in the 1990s. Annual revenue hit $100m in 2000 and by 2015 was $1bn. He has seen recessions, high interest rates, tech booms and busts and economic downturns in that time.

Even so, Dicker isn’t sure what he has learned from previous tough times to be applied now.

“It’s completely different to those. They were market induced, even if [some] had government components. This situation is entirely government induced, so we are in completely new territory.”

Dicker says his workforce was relatively mobile anyway and the pandemic has not affected their ability to do their jobs. Work has also continued unabated on a new $60m distribution centre in Sydney’s south.

Will the trend towards remote working or staff working from home, a crucial part of Dicker Data’s recent success, continue though?

Dicker is not so sure about predictions that office life will change forever due to the coronavirus. “I don’t think there will be anywhere near as much long-term change as people are predicting.”

His unconventional approach extends to outside of his work. He has spent more than a decade and plenty of money on his Rodin Cars business, which is building Formula One-style track cars on New Zealand’s South Island that he plans to sell commercially.

Dicker usually splits his time between Australia, Dubai and New Zealand (he also has property in Italy), but has been “stuck” across the Tasman since early March when the government, under Labour (Communism in Dicker’s books) PM Jacinda Ardern, quickly moved the country into a strict lockdown.

It has meant Dicker, who will front Dicker Data’s virtual AGM next week, has been away from his family for more than three months including a stint when NZ was in strict lockdown. “And I was stuck, completely alone … except for two short visits from one of my guys and a once weekly visit to the supermarket. That was not an enjoyable experience.”

Even though two women recently arrived in New Zealand with COVID-19 and moved throughout the community, Dicker is adamant it is time, with infection rates generally falling, for the borders between Australia and New Zealand to reopen.

“I’m not sure if governments understand the true ramifications of the economic conditions that they are creating with lockdowns.

“With the situation in Australia and New Zealand and notwithstanding the two infected people let through … it seems like the border between our two countries should be opened immediately.”