Compel copes with 2000 slowdown

Corporate reseller Compel has shrugged off the effects of the Year 2000-related slowdown, reporting a marked upturn and a strong flow of substantial new contracts over the past seven weeks.

Corporate reseller Compel has shrugged off the effects of the Year 2000-related slowdown, reporting a marked upturn and a strong flow of substantial new contracts over the past seven weeks.

The reseller posted pre-tax profit of £3m for the six months ended 31 December, down 39 per cent from £4.97m in 1999 as a result of an extended millennium lockdown.

Turnover for the half-year was £135.7m, up 12 per cent from sales of £121.6m last year.

Neville Davis, chief executive of Compel, said while the millennium date change had affected its first-half performance, it was a one-off phenomenon. He said it is already seeing evidence of an upturn and is confident that customer expenditure will increase during the first half of this year. Compel has already won a substantial number of new contracts from its FTSE 100 clients, he added.

Davis said the acquisition of Pangaea, completed on 13 January, is also expected to enhance earnings immediately.

"Our longer term prospects remain excellent. IT expenditure will grow as large organisations use IT not just to make themselves more efficient, but to transform their activities. Such firms will also make ever greater use of outsourcing and other services provided by external specialists. Compel is well-positioned to exploit these trends," he said.

Davis said one of the highlights of the six months was a reorganisation of the company to reflect its focus on services.