Systemax Hungary for growth as it bets on Budapest base
Losses widen for Miso parent firm last year
Systemax has put a brave face on its widening overall losses last year, pointing to its growing Budapest back-office hub as a reason to stay upbeat.
For 2013, the Misco parent firm saw non-GAAP operating profit halve to $12m (£7.2m) on sales which shrank 5.4 per cent to $3.4bn. But GAAP net losses widened to $43.8m.
Systemax insisted it made significant progress in bolstering its competitive position last year, and said its European business transition – which saw it open the back-office service centre in Budapest – was serving it well.
The hub is now home to 215 staff and Systemax chairman Richard Leeds said the investment in the facility will continue through 2014 and beyond.
"We expect these efforts will ultimately significantly improve our operating structure by lowering our cost and strengthening our ability to broaden our customer and vendor relationships," he said on a conference call transcribed by Seeking Alpha.
"[For] some of the... lesser-performing countries, we have a model were we shift the back office to Budapest, where we could become profitable in these small countries where [we] were struggling in the past. So there are a lot of benefits for us doing this consolidation."
Sales in the European Technology Product arm, which consists of Misco and Inmac Wstore, crept up 1.6 per cent year on year in Q4, but on a constant-currency basis, it slumped 1.5 per cent annually. Systemax claimed it enjoyed a "modest increase" in its Q4 gross profit in the segment.
"Our Technology Products business had a mixed performance, with our business-to-business operations in both Europe and North America showing improved revenue trends on a sequential quarter basis, while our consumer business delivered disappointing results as it continues to face a very competitive environment," said Leeds. "In Europe Technology, we delivered a modest increase in our fourth-quarter gross profit and continued to ramp up our shared service centre."