Exertis' profits hit by tepid tablet demand

Distributor's profits behind last year due to difficult trading conditions, parent DCC Group warns

Profits at distribution giant Exertis are continuing to be hit by falling demand for tablets, smartphones and gaming products, its parent announced today.

DCC Group, whose increasing scale was recently rewarded with a promotion to the FTSE 100, issued a buoyant interim management statement this morning for its fiscal Q3 ending 31 December 2015.

"Excellent growth" was achieved in each of its three other divisions, DCC Energy, DCC Healthcare and DCC Environmental, but DCC Technology - which trades as Exertis - endured more difficult trading conditions, it said.

"Operating profit in DCC Technology was behind the prior year, as the business continued to be impacted by reduced demand for tablet, smartphone and gaming products," the firm stated.

Exertis claims to be the largest distributor of tech products in the UK and Ireland and the third largest in Sweden. It also operates in France and the Netherlands.

Computing generates 30 per cent of Exertis sales, with comms & mobile and printers, consumables & IT peripherals each generating 13 per cent. Storage & networking contributes 12 per cent, gaming 10 per cent and consumer electronics eight per cent.

The global tablet install base is set to shrink for the first time ever in 2016, according to analyst ABI Research, putting pressure on distributors operating in this area.

The announcement follows on from an interim management statement in December warning that Exertis had been "significantly impacted by a weak performance in its UK business". Operating profit at DCC Technology fell 44 per cent to £6.6m year on year in its fiscal first half ending 30 September, with weak demand for tablets, smartphones and gaming products fingered as the culprit back then too.

Last month, the distributor's UK arm made a raft of new vendor signings in the smart technology space.