C2000 profit up despite troubles

European disquiet and Latin American uncertainty placed Tech Data's German arm under pressure.

Computer 2000 managed to turn in profits and sales growth for its's German arm under pressure. financial year, in spite of experiencing continuing losses and discontent in some European and Latin American divisions.

The Munich subsidiary of US giant Tech Data saw pre-tax profit reach DM150 million for the year ended 30 September, up from DM53.1 million a year ago.

Sales increased by 22 per cent to DM10.1 billion, from DM8.2 billion last year.

The pre-tax earnings included a gain of DM29.0 million, following the sale in July of the loss-making US unit AmeriQuest Technology.

In central Europe, sales grew 27 per cent to DM3.3 billion from DM2.6 billion a year ago, with the largest contributions coming from the UK and Germany.

Turnover at C2000 UK grew 27 per cent to #595 million. France and Norway were the only black spots in the region, with the subsidiaries again reporting losses. According to a company representative, these were a result of 'weak management' and problems with the implementation of IT systems.

'It's like having a classroom of 40 children - none of them will behave well all the time. In France, problems were not being reported back to Munich, but we have reorganised and there is now a lot more communication,' he said.

Strong growth in the remainder of central Europe was countered by a poor performance in C2000's subsidiaries in Eastern Europe and Latin America, where revenues fell 35 per cent to DM487 million, down from DM743 million this time last year.

The representative claimed that a 'complicated and unpredictable' market, made worse by the Asian economic crisis, had hampered operations in Argentina, Chile and Peru. He added that discussions were taking place as to whether Latin American units should be run by C2000 or Tech Data. 'It might make more sense if they were overseen in Florida,' he said.

Meanwhile, C2000 said it had approved Tech Data's tender offer for the remaining six per cent of its shares.