Proact's UK revenues fall on weak system sales

But storage integrator's wider business logs growth in Q1

Storage integrator Proact has seen double-digit growth in both sales and profits, despite declines in its UK and eastern European business units.

Reported sales increased by 21 per cent year over year - and seven per cent organically - for its first financial quarter from January to March to SEK 877m (€91.07m), while EBITDA saw a 37 per cent surge to SEK 53.6m.

The firm's Nordic region saw sales jump by 9.58 per cent annually to SEK 446m, while profits before tax rose from SEK 23m reported in the same quarter of 2016 to SEK 25m this year.

Its western business unit, comprising the Netherlands, Belgium, Spain and Germany, saw growth of 172 per cent - including 65 per cent organic expansion - to SEK 264m, which the firm claims is due to its growing systems sales business across the region.

The UK meanwhile saw sales fall by 13.95 per cent to SEK 148m, which the firm attributes to "the absence of major system sales business," but claims that services revenues for the country "continued to develop positively".

Its eastern region, comprising Estonia, Latvia, Lithuania, Czech Republic and Slovakia also shrank on an annual comparison, falling 48 per cent annually to SEK 25m.

CEO Jason Clark said that building out Proact's services business is a key priority for the rest of the year. He also said that the firm plans to take steps to improve regions that are failing to hit financial targets.

"[Our objective] involves ensuring good cost control, regular improvement and streamlining in respect of the services operation, taking the necessary measures in countries failing to meet set financial targets, and increasing the emphasis on sales and marketing within the company.

"This work will allow the company to implement a cost-effective, consistent organisation, a market-leading offering independent of suppliers, and an increased proportion of contracted revenues. The company will be continuing to focus on developing our offering in respect of datacentres, a combination of storage, servers and network, with associated services, as well as increasing our focus on cloud services. Areas such as security, automation and applications are also of increasing strategic importance for Proact," he said.

Proact reported strong growth in its overall system sales business for its first quarter of 2017, with sales jumping by 28.9 per cent to SEK 602m, while services revenues saw a more modest 7.45 per cent climb to SEK 274m.

The Sweden-based firm acquired top German NetApp and Juniper partner Teamix at the start of the year, which Proact intends to integrate under its western business unit. The deal adds 85 new employees to the company, bringing its total headcount to 804.

"Teamix is a well-established company in the German market and has outstanding expertise in various IT technology and service fields. During the first quarter, strategic work has begun to ensure that the acquired business is integrated with the Proact group, in the most efficient and effective way, to ensure the business maximises the potential in a core Proact market," said Clark.