Logicalis UK reports operating loss

UK revenue drops 9.4 per cent as profit turns to loss

Logicalis has reported a nine per cent annual revenue drop for its UK business, citing a "rapidly changing" IT industry as the main cause.

For the 12 months ending 29 February 2016, the UK arm of the Cisco, HP and IBM partner saw revenue drop from £169.8m in the previous year to £153.9m, while operating profit swung from £6m to a loss of £2.1m.

In a filing of its full accounts on Companies House, Logicalis UK said: "The IT industry continues to be a rapidly changing environment and management recognises the need for the company to continually adapt and grow.

"The directors remain optimistic about the company's future prospects, and are executing a transformation programme which will ensure that it is best suited to deliver its customers in the long term."

For the same 12-month period ending 29 February 2016 the Logicalis Group saw revenue drop from $1.51bn (£1.23bn) to $1.4bn, while operating profit fell from $68.1m to $52m.

Logicalis parent company Datatec reported its half-year figures on the London Stock Exchange in October, showing a revenue decline of 7.6 per cent year on year to $3.13bn for the six months ending 31 August 2016.

Logicalis UK also highlighted the importance of key vendor relationships and the potential problems it could face if any of these relationships change over the next year.

The filing said: "The company is dependent on certain vendors, particularly IBM, Cisco and HP.

"If any one of the principal vendors to the company terminates, fails to renew or materially adversely changes its agreement or arrangements with the company, it could materially reduce the company's revenue and operating profit and thereby seriously harm the company's financial condition and results of operations."