Exertis' UK boss says the phased roll out of an SAP system this year will address a weak point in the distributor's armoury.
Exertis rebounded from a "very difficult" fiscal 2016 to record a double-digit rise in both revenues and profits for its fiscal year ending 31 March 2017, according to results released by its parent company, LSE-listed DCC Group, this morning.
Rvenues at DCC Technology, which trades at Exertis, pogoed 10.1 per cent to £2.69bn, with 76 per cent of the total drawn from the UK & Ireland.
Operating profit powered up 17.1 per cent to £41.1m, equating to an operating margin of 1.5 per cent.
Talking to CRN, Exertis UK & Ireland managing director Gerry O'Keeffe said he was pleased with the results and highlighted audio-visual, print, security, smart technology and gaming as among the hotspots.
During the year, Exertis spent £64.2m on acquisitions, which included Hammer, which had an initial enterprise value of £38.3m, and Medium, which had an enterprise value of £8.3m.
Even stripping out the acquisitions, organic growth stood at about five per cent, O'Keeffe said.
Exertis is currently in the process of moving to a new national distribution centre in Burnley (pictured) - which is the size of five football pitches - and is also part way through an SAP roll out that O'Keefe admitted was overdue in the eyes of its resellers.
"SAP will give our customers a huge opportunity to trade with us on a hugely upgraded and state-of-the-art web transaction platform, which we all recognise is a weakness, and has been a weakness of our business for a considerable time," he said.
Exertis has invested in SAP's front-end platform, Hybris, which will come on stream in the second half of its fiscal year, O'Keeffe said.
Rival Westcon-Comstor recently fingered its recent deployment of SAP in Europe as a factor behind a sales slump in the region, and O'Keeffe said Exertis had taken precautions to mitigate against disruption for partners.
"Let's be frank, there are a number of distributors that have had issues with this over the years - Ingram, Spicers," he said. "We are adopting a very progressive, incremental approach with regard to SAP. We've focused on getting master data live first, so the master data is live within our business and that's been the case since January. We fully understand that you need to change your business for SAP, as opposed to thinking SAP will change for your business, so we're being quite cautious, and are doing a number of pilots before we go to full roll out."
Since its parent Datatec's profit warning last week, Westcon-Comstor has announced that it has completed its global SAP roll out, after first deploying the platform in the US in 2012.
"There have been challenges and we must continue to optimise, but we now have a foundation to run a truly integrated global business with much-improved analytics and data management that benefit our vendors and solution provider customers," Dolph Westerbos, CEO of Westcon-Comstor stated. "We look forward to being even better business partners going forward."
O'Keeffe said he was glad that management at rival distributor Entatech were able to salvage something from its recent collapse.
"Distribution is a tough business," he said. "You need to have very strong finances in order to play in the market."
O'Keefe indicated that the frenzied M&A of last year may not be repeated in its current financial period, although he did not rule out further acquisitions.
"They'd been in the offing for a number of years, and it just so happened that the planets aligned and they all landed in a period of months," he said. "They were all professional, value-added distribution players, and that's where our focus will be with regards to acquisition. If the right opportunity comes along we're always open to add a business that would bring new markets, new technologies or new services to our customers, but it's not acquisition for acquisition's sake."
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