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DCC sings UK distie praise

How robust is a distie business model?

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DCC, the Irish mini-conglomerate, today released preliminary results for the year ended March 31, 2001. The bit we're interested in are those for Sercom Distribution, where its IT businesses hang out.

Like Azlan which also released results today, DCC boasts a 'robust' business model - for its UK distribution division, at any rate. In other words, it can make a profit, when others are stumbling.

Sercom's group turnover for FY 2002 7 per cent up at €813.8m (2001: €753.9m); operating profit eased 1.8 per cent to € 30.6m (2001: € &31.2m). Operating margin was down three points from 4.1 per cent to 3.8 per cent, probably reflecting the fact that the bulk of IT distribution turnover comes from commodity lines.

DCC said that its UK hardware distribution business, MicroP, benefited from the acquisition of AGP, a specialist storage distie. Gem, the UK software distie business, did well on the back of demand for leisure products - the company has solus distribution rights for Microsoft's Xbox line in the UK and Ireland.

DCC reports a difficult second half for its specialist storage distribution business, based in Continental Europe. This needs corporates to spend more money, before sales start motoring again.

And finally, DCC's Irish business, Sharptext is suffering from a "significant slowdown in the Irish IT market". The company has adjusted its cost base to reflect this. We assume this is a euphemism for deep job cuts. ®

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