US slowdown hurts Tech Data in muted Q3

Europe shows resilience for distie giant as FY12 figures for UK show double-digit top- and bottom-line expansion

For its recently completed third fiscal quarter, Tech Data posted the latest in a series of muted results for the channel's distribution giants, with sales and margins taking a hit. But FY12 figures for the firm's UK operation filed this week show a hefty boost in revenue and profit.

For the three months to 31 October, Tech Data saw global sales decline eight per cent annually to $6.04bn (£3.8bn), with operating income down 22.4 per cent to $69.5m. This equates to a fall in operational margins from 1.36 to 1.15 per cent, and the decline in profitability is attributed to the effects of "competitive pricing, product mix and certain vendor programmes".

Quarterly sales in the Americas dropped 15 per cent to $2.37bn, with operating profit down more than a third to $33.7m. The picture was a little brighter in Europe, with sales down four per cent to $3.67bn and operating profit more-or-less flat at $39.4m. Tech Data stressed that regional sales would have grown five per cent on the corresponding period last year were it not for the impact of the weakened euro.

Chief executive Robert Dutkowsky said: "While Europe's positive results did not completely offset the Americas shortfall, recent investments and capital structure enhancements enabled us to minimise the impact to earnings per share."

In the UK, Computer 2000's results for the year to 31 January 2012 were filed with Companies House this week, and the accounts show turnover rose more than 15 per cent during the year to £1.43bn. Operating income jumped 25.4 per cent to just over £14.4m, while average monthly employee numbers grew from 622 to 642 over the course of the year.

The directors' report for the year chalks the profit boost up to "a significant focus on diversification through the ‘Collection of Specialists' [strategy] and managing costs".

"[The directors] consider that 2012/13 will show a continued growth in sales and profitability as the company continues with its strategy of diversification and managed organic growth," the report noted.

In summer 2008, C2000 outlined ambitious plans to double in size over a five-year period and become a £2bn outfit in the UK. The recent addition of £400m-plus SDG, coupled with similar levels of organic growth, could see the distie titan fulfil its ambitions next year.