Morse warns of weak quarter

Corporate reseller issues profit warning for its first quarter of 2002

Corporate reseller Morse has warned that customer confidence remains weak.

Morse said its sales for the first quarter of its financial year to 30 September will be £93m compared to £111m for the same period last year.

Services revenues increased to £25m from £23m last year, while infrastructure revenues decreased to £68m, from £88m in 2001.

The company said client confidence continues to reflect general economic uncertainty, and until it improves, sales forecasting will remain difficult.

"We are now doing our quarterly results and they are broadly in line with expectations with infrastructure revenue dropping and services increasing," said Mark Byatt, marketing director at the reseller.

A lack of customer confidence was cited as a major stumbling block for growth. "Until the economic conditions improve it will be tough for everyone," added Byatt.

The company said it still had a strong cash position, with a balance of £73m at 30 September.

Gordon Davies, commercial director at reseller Compusys, said he expected revenues for the next year to be up 20 per cent, and that a recession would be an opportunity for the channel to give customers real savings through IT.

"I know this is a cliché but you have to understand your customers' business so you can deliver value," he said.

Technology value can come in different ways, according to Davies. "This could be reduced costs, it could be to help them grow business in new markets and it can help them use the data they have more effectively," he said.

"We have some real hot spots that are growing very rapidly. These include the small and mid-size enterprise sector, the public sector and any area where we can bring real cost savings to the table."

Some product areas where Compusys is experiencing high take-up include knowledge management, security products to lock down the web, storage, voice over IP and outsourced services.