Tech Data storms in with record results
Distribution giant Tech Data said it is experiencing a massive market shift in its favour, following record fourth-quarter results.
Distribution giant Tech Data said it is experiencing a massive market shift in its favour, following record fourth-quarter results.
For the three months ending 31 January, Tech Data - the parent of European distributor Computer 2000 - recorded sales of $4.8bn. This is a 24 per cent rise on $3.9bn the previous year. Profit for the quarter was $37.1m, up from $34.5m the year before.
Steve Raymund, chairman and chief executive of Tech Data, said the distributor is experiencing strong growth in the US in particular. Sales in the region grew 39 per cent during the fourth quarter.
"Key competitors here are fading, causing massive market share shift in our favour," he said.
Raymund conceded that growth in Europe was slower than in the US, but added: "Our advantages [over the competition] include a strong balance sheet, seasoned and cohesive management, good execution and the right strategy.
"Our activity-based costing system, which measures in fine detail the cost to serve individual accounts, is a key advantage in pricing correctly and competitively."
Raymund said Tech Data had begun raising prices, claiming the irrational pricing prevalent throughout 1999 is showing signs of subsiding. He declined to comment further on the nature of the rises.
For the full year ending 31 January, sales increased 47.4 per cent to $17bn, compared with $11.5bn in 1998. Profit for the year was $127.5m, up from $119.4m the previous year.
European sales grew 22 per cent in local currency during the fourth quarter to $2.2bn, with an operating profit of $26.1m. For the full year, European sales were $7.5bn, achieving an operating profit of $95.2m.
Commenting on the European results, Art Singleton, vice president of finance at Tech Data, said: "Ingram Micro had sales of about $7.3bn in Europe and operating profit of $21.5m. Therefore, while our sales are about the same as Ingram's in Europe, our operating profit is about 4.4 times over Ingram."