While Dicker and his co-founder Fiona Brown contain the vast majority of the company (extra than 70 per cent between them), Dicker says the company’s other traders are supportive of all the profits being paid out as dividends, because the trade doesn’t operate fancy one of the now-popular excessive-increase software companies such as WiseTech or Whispir.
“You can easiest attain it in certain forms of agencies,” he says. “Our trade isn’t capital intensive. Exterior of the real estate … we don’t have a requirement for capital, because we’re no longer a manufacturer. So we have been in a space to pay out all our profits, and it’s something that appealed to me.“
Dicker Data, which has a market capitalisation of $1.9 billion, is a hardware and software distributor. It acts as a middleman connecting vendors and resellers of IT hardware, software, cloud and IoT solutions.
In the past year its share worth has surged 124 per cent, from $5 to extra than $11.
In the company’s fresh stout-year results, it revealed income had leapt 12.8 per cent to $2 billion, whereas its net profit after tax jumped 5.3 per cent to $57.2 million.
EGP Capital founder Tony Hansen offered into the company around April 2012, when it was trading at easiest 40.5¢.
He has already been paid back three instances his funding in dividends alone, nevertheless says he initially pushed Dicker and CFO Mary Stojcevski to lower its dividend payout ratio and slit back the company’s debt.
But in his nine years of owning the stock, he’s near to opinion Dicker’s strategy as the appropriate one.
“Substantially, all the other prime 10 holdings in my fund are net cash, I don’t fancy debt,” he says. “But David has an idiosyncratic examine as to why companies exist – to place money in shareholders’ pockets – and he’s always said if there was a valid reason to raise fairness, then he would attain so.
“In his examine, this introduces capital self-discipline and it forces the managers of the company to assume carefully about how they deal with capital, because there’s restricted access to it.
“It’s been demonstrably proven to be the appropriate thing to attain. It doesn’t have an excessive level of debt relative to the earnings of the company … and it’s got lower relative to total earnings.
“I’m a convert, although if I was CEO I’d probably accelerate the company with a lower debt level, because I’m a conservative operator.”
Not paying himself a salary isn’t the easiest way Dicker bucks the mould of a traditional CEO of an ASX-listed company.
Embrace the wealthy
He’s outspoken, self-assertive and owns a supercar manufacturing trade on the aspect called Rodin Cars.
When asked what the country wished to attain to leverage the momentum surrounding the acceleration of digitisation off the back of COVID-19 thanks to the gargantuan shift to far flung working, he said it’d be no longer doable to change into a tech-led digital economy with out a shift in how Australians examine the ultra-wealthy.
“The real field we have is wealth is built on the replication of single objects, which is why I don’t fancy companies and products,” he says.
“It’s either built on manufacturing, where you gather a product and make thousands or millions of them, or write software and sell copies of it.
“A few hundred bricklayers don’t generate wealth in the same way because you don’t gather that economy of scale.
“To make it work, you have to have a society comfortable with the fact that a handful of ideas will change into very wealthy and another handful will be delicate wealthy, nevertheless that’s no longer very socially acceptable in Australia.”
Dicker says this model leads to of us such as Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey, who are “fabulously wealthy” nevertheless don’t desire any popularity contests.
“That’s the setting you have to have. You want a free society, which we’re in grave danger of shedding with the way the tradition is going, and then you have to maximise personal freedom and agency to make this happen.”
Dicker says there is no longer any right way for the authorities to pressure a step up in of us coming up with innovative products or software.
“All of these issues depend upon of us coming up with ideas, and that’s the antithesis of governments, which are bred in conservatism, be it Liberal or Labor.”
Labour law changes
Dicker has also been a long-time supporter of versatile working, embracing the idea when the company was founded 43 years ago.
This, he says, helped him to establish a 43 per cent to 57 per cent female to male gender break up in the company- a percentage far larger than most of his trade peers.
”It was a wide awake strategy that went back to the ’80s, or really further back than that, he says.
“After I was in primary faculty, I went to a co-ed faculty … and the smartest younger of us would be sat at the back. There have been at least half a dozen ladies smarter than all the other boys.
“It was delicate glaring to me they had the capability. I’ve never been a guy who understanding males have been superior to ladies people. So when we started to rent of us, we delicate mighty exclusively employed ladies people that have been mothers and wanted to near back to work.”
In the `80s, Dicker was able to offer these working mothers versatile, successfully-paying roles, nevertheless they have been paid on an hourly basis. He says this enabled them to dwelling their contain hours and no longer fear if they wished a morning off for faculty descend-off.
But he says the fresh strict labour laws cease companies from adequately offering the versatile stipulations necessary to encourage ladies people to rejoin the group of workers after having teenagers.
“It was a versatile setting that worked successfully for all and sundry. Unfortunately the authorities made it illegal, which I accumulate aggravating,” he says.
“There’s always a percentage of of us that will screw of us over, nevertheless it absolutely hurts the economy no longer being able to attain that.
“Ladies with younger of us have diversified priorities, and the easiest way to tailor to those priorities is with a extra versatile system. The fresh laws are built on buildings around the basic idea of a 40 hour week … which is suited to male employment, and that’s the field.”