Irish distribution giant DCC increased profits by 8.5 per cent for the year ended 31 March 2005.
But results for the diversified group were dragged down by a 12 per cent fall in profts from its IT distribution business. IT distribution brought in €27.5m, a fall of 11.9 per cent on last year. By contrast the group’s healthcare division increased profits by 16.1 per cent and food and beverage upped profits by 21.7 per cent
Jim Flavin, chief executive of DCC, blamed “very challenging market conditions which have prevailed... since late 2004.” In January the firm took a one-off €16m charge to restructure SerCom, the technology division, and to restructure its energy business.
IT distribution made sales of €878.2m compared to €859.4m last year, an increase of 0.8 per cent under constant currency. Operating margin also fell to 3.1 per cent from 3.6 per cent last year.
The company said the first half of the year went well but in the second half good volumes were hit by falling prices - hardware sales were particularly badly hit in the final quarter. Software sales have been better with good growth in games sales. European sales had a “challenging first half”, especially in Spain.
DCC’s IT distribution arm, SerCom, sells hardware and software to dealers and retailers. In continental Europe it specialises in mid-to-high-end storage equipment in France, Spain and Portugal. It also operates as Distrologie in France, Gem and Micro-P in the UK and sharptext.com in Ireland.
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