Distribution powerhouse Exertis endured a "very difficult year", parent company DCC Group said as it unveiled its annual results, adding that it is confident recent cost-cutting actions will restore the distributor to growth.
While showering praise on its Energy, Healthcare and Environmental division, newly crowned FTSE 100 firm DCC Group admitted its DCC Technology arm had endured tougher times in the 12 months to 31 March 2016.
Operating profit at DCC Technology - which trades as Exertis - fell 28.8 per cent to £35.1m, with operating margin sliding from 2.1 to 1.4 per cent.
Boosted by a couple of recent acquisitions, including Apple distributor Computers Unlimited, DCC Technology's revenues rose 3.9 per cent to £2.44bn.
"Challenging trading conditions" experienced in the UK, which generated 72 per cent of DCC Technology's sales, more than offset better performances elsewhere, including in the Nordics and Benelux, which saw "strong organic growth", DCC said.
As already reported, UK sales were hit badly by a reduction in sales of products from one large supplier and weaker demand for tablets, smartphones and gaming products. Like for like UK sales fell seven per cent.
"In response to the challenging trading conditions in the UK, the business has reduced its cost base and is continuing to build its market position in new and developing product categories such as smart technology, audio visual, network security and virtual reality," DCC said.
The construction of a new 450,000 sq ft UK distribution centre in the north of England is "progressing well", with a phased relocation to the new facility set to take place in DCC's fiscal second-half beginning in October, the firm added.
DCC said DCC Technology is focused on broadening its activities in the coming year, both from a product and customer perspective.
"The business is confident that the business development and cost efficiency initiatives undertaken will bring about a return to growth in the coming year," it said.
Minority investment from Inflexion marks ‘final step’ in demerging DWS from Daisy Group
Daisy spin-off valued at more than £1bn in rumoured deal with private equity firm
French security VAD says systems in France, the UK, UAE, the US, and Singapore were affected
Ingram Micro was sold last week for a cool $7.2bn, after Tech Data was snapped up by Apollo earlier this year for over $5bn. CRN asks channel figures whether we are entering an era of high-price M&A deals and what it says about the health of the sector...
Distributor says joint investment will target AWS adoption among SMB customers across the region
We asked a number of channel veterans to sum up what they believe this year has in store for the tech sector
French services heavyweight reportedly eyeing up US competitor
CEO of unified comms VAR opens up on hitting £100m, redesigning a new corporate office for post-COVID business and private equity interest in his space
Employer behaviour, work-life balance and re-evaluated priorities are driving factors behind new job searches, according to Reed