Birmingham-based reseller and IT services powerhouse SCC yesterday unveiled record results, with group revenues for its year to 31 March 2018 up nine per cent to £1.8bn and UK revenues rising three per cent to £591m. Operating profits were also up.
James Rigby, CEO of the privately held firm, talked us through his growth plans and views on the market in the aftermath of the results.
Hi James. Overall, do you feel more or less positive about the state of the industry than 12 months ago?
More positive. There are two key things for customers. They have to digitise their businesses. You see lots of businesses trying to catch up on that. Like retail, for instance: the old world of bricks and mortar is dying. They have to go online and they have to invest in their businesses in the digital workplace. And the second thing is hybrid IT. They have to take cost out, so that means putting applications in the cheapest, most secure, most efficient place. So the appetite for investment in technology is very strong; they have to do it. Of course the unknown for all British businesses at the moment is Brexit. But again the need for businesses to transform and become more efficient and digital will power through even that. The climate for the industry is good.
How would you assess your financial performance for the year, both in the UK and EMEA?
It was another record year for us, both at a European level and in all the individual countries. We saw particular strength in our French product business. In the UK we had very good growth in our service business particularly, whereas for product it was a year of two halves: we had a relatively slow first half due to various project delays and so forth, but really strong growth in our second half. In our last quarter, product was up by 24 per cent in revenue terms and we've seen that continue into the April to June period. Revenue growth has been particularly strong in digital workplace - in desktops, laptops and networks.
Could you break out the UK numbers?
UK revenue was £591m versus £573m the prior year and operating profit was £17.1m versus £16.7m [this does not include print arm M2].
You've made it clear you're not interested in expanding beyond the UK, France and Spain. Why is this, and does this contrast with some of your peers, like Computacenter?
We believe there is enough opportunity in territories we are in already to make them bigger and better. We have no ambitions to become an international player and service global clients - that's not us.
Certain peers like a Computacenter are dealing with those very large global corporates, so perhaps they need to have that international multinational footprint. We are not dealing with those types of clients. We are the midmarket or enterprise-level clients that tend to be domestic. We are content in the markets we are in and see lots more opportunities in those markets without biting off another country.
Continue to the next page for Rigby's thoughts on acquisitions and why SCC's cloud platforms are not always the answer...
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