Pan-European storage integrator Proact has warned that profits at its UK arm have been hit by faltering product sales here.
The Stockholm-headquartered firm said the profitability of its UK unit – alongside its eastern European business – had not met expectations as it unveiled an otherwise solid set of interim results.
Its UK business, which is based on Proact's 2011 acquisition of B2Net, suffered an annual pre-tax profit fall of more than three quarters for the six months to 30 June, to SEK1.2m (£103,000).
Sales from this country, which were given an artificial sheen by positive currency effects, inched up one per cent to SEK266m. Services revenues, including cloud services, increased, but a lack of major system contracts hit system sales.
"Development of system business has been weak during the quarter, adversely affecting profitability," Proact managing director Martin Ödman said of its UK business.
For the group as a whole – which employs 630 staff across the Nordics, parts of eastern Europe, Benelux, the UK and Spain – pre-tax profit powered up 71 per cent to SEK38.1m on revenues that rose by four per cent to SEK1.165bn. Sales from systems inched up one per cent to SEK755m, while services sales leapt eight per cent to SEK407m.
Ödman said the business had "continued its positive development" during the second quarter.
"Our strategic decision to focus on integrated systems has paid off in terms of both revenues and profit," he said, adding that cloud revenues were up by 42 per cent, with new contracts worth SEK24m signed during the quarter.
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