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By | Paul Kunert 4th May 2016 13:20

Long term sick-note abuser Misco not losing nearly as much money

Sales still slid in calendar Q1 but patient is out of intensive care

A pinkish hue has yet to return to the cheeks of sickly European reseller Misco but its latest financials indicate the patient is finally out of intensive care - the same cannot be said of its parent.

Most of Misco’s vital statistics improved in calendar Q1, all but sales which slipped 5.3 per cent to $258.2m - or were down a more modest 2.2 per cent in constant currency.

Larry Reinhold, recently made CEO at Misco parent Systemax, said French ops grew top and bottom lines by “double digits, turnover at the Netherlands services unit was up 20 per cent and “we also had solid sales growth in a number of our smaller markets”.

The UK “significantly” stemmed operating losses and the company is recruiting local sales reps and moving into a North London base.

“While it is still early, we are seeing encouraging recruiting activity related to these programmes,” said the CEO.

EMEA gross margin improved 1.5 per cent to 13.2 per cent highlighting a “change in sales mix, which included fewer low margin government procurement projects in the quarter”.

Selling, general and administration (S,G&A) expenses fell by $1.5m in the period largely due to changes in exchange rates, and the operating loss was cut to £800,000 from $4.8m a year ago.

Over at US HQ, the P&L accounts looked decidedly more blood stained, what with the cost of exiting the North America reseller business.

The continuing operation across the pond, the Industrial Products Group which sells air-con units, office furniture and stationary, grew 7.4 per cent to $170.6m. Here operating income fell to $7.9m from $9.7m in the prior year period.

This meant group sales came in at $429.8m versus $512.1m a year earlier (including elements of the US reseller arm). Gross margin was 19.4 per cent from 17 per cent, S,G&A fell to $82.3m from $93.9m.

Special charges of $1.6m and centralised corporate costs of $5.8m left an operating loss of $500,000 compared to an operating loss of $12.1m in Q1 2015 which included the cost of restructuring.

Finance and taxes left net loss from continuing operations at $1.1m compared to a loss of $21.8m.

Systemax - which also once built PCs and owed retail stores - offloaded its reseller arm, the North America Technology Products Group to PCM at a cost of $55m and it closing down related ops not included in the sale.

The cost of this in the quarter was $16.2m, which led to a total group loss of $17.3m, as the shape shifting continued.

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