Services success boosts SCC bottom line in FY10

Integrator offsets product decline in successful fiscal year and invests £11m in datacentre to fuel more services growth

At your service: SCC now generates 22 per cent of overall sales from services

An increase in margin-rich services business helped pan-European integrator SCC grow profits in its 2010 fiscal year by more than 40 per cent, despite a slight revenue decline.

Documents filed with Companies House this week reveal the Birmingham-based firm's sales for the year to 31 March fell 4.3 per cent year on year to £489.4m. But pre-tax profit was up 43 per cent year on year to £6.9m.

The directors' report claimed FY10 was "a successful year" for the company and pointed to a rise in services revenue. As a percentage of overall sales, services grew from 20 to 22 per cent during the year, which SCC claims is "in line with the company's strategy of improving revenue mix".

"Despite the tough market competition, services margins were maintained, as effective cost management reduced direct headcount costs during the year," said the report. "The company is engaged in an ongoing review of direct costs to maintain margins and improve competitiveness."

During the year, average monthly staff numbers were reduced by over 100 to 1,898. About 50 salespeople and 40 engineers were shed, leaving the integrator with 305 and 1,192 respectively.

One major investment last year was the development of a datacentre at the Cole Valley site in Birmingham. As of the end of March, £2.6m had been spent on the project, with a further £8.5m set to be splashed out during FY11. The directors' report reveals construction of the datacentre is scheduled to be completed this month.

"The datacentre is a technology-smart, eco-friendly, Tier-3 datacentre, which will be government security rated and iSO27001 accredited, with its own independent network operations centre," the report added.

"The new datacentre gives the company the advantages of flexibility and scalability inherent in operating a dual datacentre network, allowing it to offer customers access to data replication alongside a range of market-leading hosted services, including co-location, fully managed services, technology-as-a-Service and software-as-a-Service."