SDG saves Tech Data in strong European year

Results from 2013 acquisition help reverse revenue slide

Tech Data profits rose to $109.8m (£65.6m) in its Q4, with recently acquired SDG turning around the firm's European sales to boost its full-year revenue ending 31 January 2014 to $26.8bn.

According to Tech Data's announcement to the Stock Exchange today, excluding SDG from both Q4 and full-year results would have resulted in a four per cent shrinkage in net turnover for the European region.

"In Europe, net sales were $16.6bn or 62 per cent of worldwide net sales, an increase from the prior fiscal year," it said.

"SDG contributed approximately $2.3bn – or approximately €1.7bn – to fiscal 2014 net sales."

Weak economic conditions had continued to affect the Tech Data business in the year ending 31 January, the company said, as well as "competitive pressures" and a focus on gross margin, which remained more or less stable at approximately five per cent.

Tech Data's global profit for Q4 was just $44.4m on net sales of $8bn, with the US representing a slightly larger share of its revenue – 34 per cent – in the quarter than in 2013. The company's European turnover expanded nine per cent in US dollar terms, and five per cent in euro terms, to $5.3bn in Q4.

Full-year overall profit in 2014 was $179.9m, up from $176.3m in the previous year, the company said.

Net sales globally for the fiscal year were $26.8bn, up six per cent from fiscal year 2013.

"Excluding the net sales of SDG from both fiscal years, net sales decreased approximately one per cent from the prior fiscal year. Excluding net sales of SDG and the positive impact of the strengthening of certain foreign currencies against the US dollar, net sales decreased approximately three per cent from the prior fiscal year," according to Tech Data's announcement.