Remote working boom supercharges Cancom's revenues

Germany-headquartered reseller posts 27 per cent quarterly growth

Cancom has started its FY2020 with a return to quarterly revenue growth above 20 per cent, preliminary figures show.

The German reseller giant's Q1 numbers show revenues were up 27.3 per cent year on year to €453.8m.

It marks a return to form for the Munich-headquartered reseller, which boosted its UK presence in 2018 by acquiring OCSL.

It has often exceeded 20 per cent growth in its quarterly financials, however, that rate slowed in its final quarter of FY2019, when sales grew by 18.9 per cent.

Meanwhile, EBITDA was €26m in Q1, up 3.5 per year on year.

Cancom CEO Rudolf Hotter said the sale of software licenses and hardware to enable remote working was the main reason for its revenue performance.

"We achieved an outstanding revenue performance in the first quarter and were able to acquire many new customers," he said.

"There was particular demand for laptops and tablets for working on the move or in the home office."

Hotter added that growth in EBITDA was impacted by a one-off executive board severance payment, and because of a strong performance for its low-margin PC client business.

Cancom's statement to investors did not specify whether former CEO Thomas Volk, who resigned in January due to "differing opinions" to the board, was the beneficiary of the payment.

Broken down into its two segments, Cancom's cloud solutions revenues grew by 35 per cent, while IT Solutions rose by 25.5 per cent.

However, it was IT Solutions that made up the lion's share of the group's Q1 sales at €366.3m.

Despite a stellar quarter, the company is forecasting that its Q2 will be more adversely impacted by the coronavirus pandemic.

"It is already becoming apparent that, as expected, the second quarter will be significantly burdened by the corona crisis and the almost complete shutdown in April and May," Hotter said.

"Although uncertainty about the further economic development remains very high, in view of the high growth rate in the first quarter and assuming a normalisation of the general conditions in the third and fourth quarters, we are maintaining our annual forecast of moderate revenue and earnings growth."