Compel services push up profits

Dealership hopes to double sales thanks to Hamilton Rentals acquisition

Compel has squeezed an extra 18 per cent profit on flat half-year sales. The dealer attributed a two-point rise in margins for the six months to December 31, compared with the same period last year, to a shift away from product sales to service-led business.

Interim profits climbed to #1.7 million on sales of #39.5 million for the period, against pre-tax profits of #1.4 million and sales of #40.4 million last time. Gross margins edged up from 17.3 per cent to 19.4 per cent over the same period.

Neville Davis, chairman of Compel, said the reseller had shifted away from product sales. ?We increased our focus on services and we de-emphasised products so we did less low-value systems-sales which is why profits went up relative to turnover,? he said.

The period included two ?substantial? desktop outsourcing wins with, major corporates. The results do not include the acquisition of Hamilton Rentals, completed last month, which reported sales of #35 million for the year.

As a result of the acquisition, the dealership is expected to double its sales by the end of the fiscal year, as it anticipates combined sales of over #150 million. Compel reported sales of #85 million for the full year in 1996. Davis said that there would be no more acquisitions in the meantime.

Hamilton Rentals provides Hewlett Packard and Digital systems and services and rents computers. MD David Frankling was appointed to the board last month.