Systemax hails solid Q1

WStore parent sees sales grow two per cent, but operating profit drops

Systemax has reported a "solid" first quarter as economies across Europe continue to stabilise.

The firm, which bought WStore in September 2009, saw consolidated sales for the quarter ended 31 March 2011 grow two per cent to $929.9m (£563.3m).

Operating profit dropped slightly to $18.6m, compared with $20.4m in Q1 2010. Business-to-business sales grew eight per cent to $480.5m, with consumer sales dropping four per cent to $480.5m.

Richard Leeds, chief executive of Systemax, said: “We had a solid start to 2011 that underscores the channel, product and geographic diversity that define Systemax. Our Technology Products' business-to-business operations continue to perform well, particularly in Europe as the business climates in most of our locations appear to have stabilised.

“In addition, the Industrial Products group had another outstanding quarter, delivering strong double-digit growth from product expansion and other growth initiatives. Consumer channel results were soft, reflecting the choppy economic environment; however, we did see improvement in our performance as we moved through the quarter.”

Leeds said gross margins improved compared with a year ago as Systemax sees "encouraging signs" from strategic initiatives designed to improve margins.

He added: “Operating margins declined due to investments in business-to-business operations, including the addition of sales heads and costs related to new stores and the new distribution centre for the Technology Products segment. Overall we are well positioned with a solid balance sheet, which provides us tremendous financial flexibility and a deep management team that is committed to building long-term value for our shareholders.”