Brexit and the emergence of COVID-19 led to challenging market conditions for Exertis in the UK in its most recent fiscal year.
The broadliner's parent company DCC announced earning results for its year ending 31 March 2020 yesterday, reporting that its technology unit - which trades as Exertis - saw revenue jump 7.8 per cent to £3.9bn. Operating profit for the division saw a one per cent growth to £65.3m.
Contributions from acquisitions and a "good trading performance" in North America and Europe offset the "difficult market conditions" in the UK, the distie stated.
Exertis Group managing director Tim Griffin told CRN that the UK was the only region that "went backwards" for the distie, chalking it up to Brexit uncertainty and the beginnings of the coronavirus outbreak.
"The only place we went backwards was the UK and the UK is really a function of Brexit and the consumer challenges that we saw there in terms of confidence in the marketplace and the declines of retail," he elaborated.
"We have probably a disproportionate exposure to retail having a very high share of the retail distribution market. If you look at the British Retail Consortium commentary, they say that 2019 was the worst on record and then you overlay that with the beginning of 2020 with COVID-19 and it was a severely challenging environment.
"The UK was challenged and we overcame that at Exertis with our international expansion."
The group MD anticipates further challenges ahead for the UK market, predicated around the eventual economic fallout from Brexit and working around the presence of COVID-19 for the foreseeable future.
"There are a series of challenges that lie ahead, and there are a few things that we are focused on," he stated.
"One is around that digital journey for etailers and being able to provide them with a range of services that facilitate them navigating their way through the etail revolution and I think that we will see more of our business being done online.
"We've added a range of service offerings that will counter some of those headwinds, including remote management, mobile device management security and vendor-offered service solutions.
"We've got a raft of initiatives in the UK that we're pretty confident will see us through the next 12 to 18 months as well as lay the foundations for many years to come."
DCC group - which also houses healthcare, oil and retail and gas units - saw total revenue dip over three per cent to £14.7bn for the 12-month period, which Griffin attributed to an "oil price phenomenon", adding that the overall performance from the group was "bullish".
In the technology division, Griffin highlighted products and services for remote working and the "clicks" business as being areas of noticeable growth due to the pandemic. However, on the flipside, he added that the Pro AV business has had a number of delayed projects.
"While we've had some notable wins in the Pro AV business, ultimately, a lot of that business is predicated on a physical installation or deployment on a customer's site that might otherwise be closed, and so, while we've got some good projects lined up, we haven't ever been able to execute those," he explained.
"We do an awful lot of retail, both in the UK and then more widely across our portfolio, but retail operations in the UK have rapidly converted to effectively enabling the etail revolution during lockdown. The majority of our shipments at the moment are now drop ship direct to consumers homes - that's been another big win for us."
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