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By | Team Register 1st September 2005 15:05

Value added reselling is dead - Morse chief

Hard cheese for hardware

Value added reselling based on computer hardware "is dead", according to Duncan McIntyre, CEO of Morse Group, the corporate reseller.

In a webcast yesterday accompanying full year results, Mcintyre said that commoditisation of computer hardware was a permanent fixture. But he sees “significant opportunities” in his own business for profits from a slimmed-down reselling stall nestling within a bigger services sales pitch.

Morse remains a big supplier of computer hardware in its home UK turf, but it has set its sights on transforming itself into a business where services accounts for 70-80 per cent of revenues.

Service revenues for the year to June 30 increased by 52 per cent, much of it driven by the £50m acquisition of Diagonal, a SAP specialist. But 16 per cent of growth was organic. Services now accounts for 44 per cent of group revenues. Pre-tax losses widened to £18.3m (£12.4m) on sales of £429.5m (£390m ).

In July it sold its loss-making £44m t/o French business for the knockdown price of €1 (and maybe some more) because it was too much of a reseller and not enough of a services business. The cost of transformation would have been too much, it said.

The company continues to operate in Germany, Spain and Ireland, where services account for 34-52 per cent of revenues.

Morse results are here (pdf). ®

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