InterX Group - which includes Ideal Hardware - suffered lower grossg up for vendor's range. margins on sales in the interim as a consequence of being signed up by Compaq to distribute the vendor's entire range.
According to the chairman's statement that accompanied the 26 weeks' trading ended 29 January, gross margin fell to 11.9 per cent, down from 14.8 per cent last year, 'reflecting, as expected, the lower margins on sales derived from our appointment as a distributor for Compaq'.
Talking to PC Dealer last week, James Wickes, managing director of InterX Group, admitted that margins were low on Compaq kit. 'We simply make less on Compaq equipment than we do on our storage offerings. The fall in margin is mainly due to the high volumes one has to achieve to be a Compaq player,' he said.
Wickes added that traditionally, margins would float between 13 per cent and 15 per cent. Excluding the impact of the Compaq business, margin would have been at 13.3 per cent.
Nevertheless, the distributor has resigned itself to low margins on certain products and is gearing up for high-margin sales opportunities. InterX was made a Compaq Integration Partner (CIP) last month and will configure Alpha Unix and Open VMS servers and workstations through Ideal Unisolve, its services unit.
InterX was formally signed up by Compaq in July 1998, after it was inherited from Digital's channel.
The distributor saw six-month pre-tax profit of #3 million, down from #4.9 million last time. The figure included exceptional charges totalling #1.5 million, relating to group restructuring costs and startup costs for its IT Network unit. Turnover for the period was #148 million, up 34 per cent from #110 million.
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