TOP 200 : Mediaweb Best Growth Strategy – Datacom Group

Datacom is homegrown IT services company success story. As this magazine said last year when the company was chosen as finalist in the 2008 Deloitte/Management magazine Top 200 Company of the Year category, “this former computer bureau business understands its market, its customers, its technology and the meaning of service”.
In the year to March 31, 2009, and “despite the somewhat difficult market conditions”, Datacom increased both its revenue and profitability. The New Zealand portion of the revenue increase was pleasing 4.5 percent. But even more gratifying for chairman, and the company’s guiding light for the past 25 or so years, John Holdsworth, was the 79 percent increase in revenue generated from Australia and Asia. The Group’s revenue is now split 45 percent New Zealand, 55 percent Australia/Asia.
Datacom is doing just what the Government wants more New Zealand companies to do – commit to building offshore operations and becoming successful global competitors. Holdsworth and his team have set their growth strategy and stuck with it year-on-year. Now Datacom shareholders and employees are reaping the rewards. The group boasts 10-year compound growth rate of 14 percent for revenue and 16 percent for profit – outstanding in any marketplace.
The company’s strategy does not, however, call for unconstrained growth. As Holdsworth says, Datacom focused on consolidation after significant new business wins and acquisitions in Australia and Asia last year. And the business has continued to mature around its core outsourcing IT services.
Datacom also keeps investing in the business. It spent $35 million on capital expenditure during the year, almost $25 million of which went into the construction of its new datacentre in Albany, Auckland. This is the first large, purpose-built datacentre built in New Zealand since the 1970s and is, says Holdsworth, “unsurpassed in its ability to provide customers with safe and reliable computing housing now and in the future”.

JUDGES COMMENTS
Winner : Datacom Group
Datacom Group was finalist in last year’s Top 200 Company of the Year Award category. It has performed stunningly well again this year. It is another homegrown success story, specialising in the IT-driven information services industry. Its successful business strategy has taken it to Australia and Asia. Its cornerstone of success is set squarely on individual Kiwi enterprise and intellect, innovation and service. As the judges said last year, Datacom’s directors, managers and employees understand their market, customers, technology and service needs. Its growth strategy works. Its revenue increased 35 percent and after-tax profit lifted almost 10 percent, despite difficult market conditions last year. The company’s strategy is delivering impressive and sustained growth.

Finalist : Ebos Group
Ebos Group’s growth strategy is based on synergistic business acquisition. It is very good at it and, as consequence, the group benefits from the economies of scale generated by the strategy. Revenue at this medical consumables enterprise climbed healthy 23.2 percent and after tax profit by an equally rosy 18.4 percent. The company operates successfully in highly competitive marketplace. Its strategy is steadily delivering on its stated goal of becoming Australasia and the Pacific’s leading independent healthcare and related products supplier.

Finalist : Zespri Group
Zespri’s highly succcessful growth strategy of global market expansion, clever brand marketing and new product development has collectively borne fruit for the enterprising but sometimes under-siege cooperative. The market power its single desk marketing approach delivers for this unique New Zealand product is also factor in its success. Revenue grew 27.2 percent and after-tax profit climbed 21.3 percent last year, delivering good returns for growers. Compared with, for example, the meat or pip fruit industries, the kiwifruit industry’s marketing strategy delivered by Zespri is an outstanding New Zealand success story.