Logicalis' UK losses widen as revenue falls below £100m

Directors say they're confident recent restructuring will steady the ship

Logicalis saw sales in the UK drop below £100m in its last financial year as the global Cisco partner works through a restructuring.

For the year ending 28 February 2019 Logicalis' sales fell 14.5 per cent to £92.2m, while operating losses widened from £2.7m to £25.8m - largely as a result of "transformation costs".

A restructuring was confirmed at the start of this year, with the firm's head of Europe Ruediger Rath admitting the business was "not as agile as it should be".

Logicalis was a £200m-plus revenue business in the UK as recently as 2014.

In its full accounts, filed with Companies House, Logicalis said: "This transformation involved the restructuring of the scope of business undertaken by significantly reducing the go-to-market offering in the product and services businesses, and enabling sales professionals to sell the redesigned services portfolio; focusing the number of markets in which we engage and aligning the sales and marketing team around vertical market sectors; [and] redesigning key processes to enable efficient service delivery and sales support processes.

"The directors are confident that the company is well placed to take advantage of the opportunities it faces having undergone [the] internal reorganisation."

Logicalis said that the primary driver for the revenue decline was "lower demand for goods and services" across its customer base.

Gross profit dropped 38.8 per cent as profit margins for hardware fell and the ratio of services to product sales decreased.

The hefty increase in operating losses was attributed to a goodwill impairment of £15.2m.

Logicalis appointed a new UK managing director in Alex Louth in May, while Robert Bailkoski became global boss last month.