Feeds

Morse dogged by falling Sun, HP sales

But IBM is on the up

  • alert
  • submit to reddit

Sales carry on falling at Morse, Europe's biggest Sun dealer, but customers are rejecting other lines too. In its interims out today (but highlighted by the company last month), Morse revealed that Sun hardware sales slumped 36 per cent, while HP, another major mid-range franchise, were down 32 per cent for the six months to December 31, 2002. Overall, so-called infrastructure sales fell 27% in the six months to 31 December 2002 to £128.6 million.

The one bright hardware spot is the IBM line which saw sales grew 3% to £29.9 million. By Morse's reckoning, lower sales volumes of Sun and HP midrange reflect the performance of the "whole enterprise market" - it thinks it held onto market share in its key verticals - finance and telecoms - during the period.

Which is bad news for Sun and HP: Morse notes that its enterprise hardware sales are down 52 per cent since the six months ended December 31, 2000. And it says that trading conditions have not improved.

As for IBM, Morse is chipping away, from a much smaller base, at market share rented by other dealers. This month it bought a GSA, a small London AS400 (OK, iSeries) dealership, to help it chip away some more.

In common with any major reseller, Morse likes to highlight its services business, which now accounts for 31 per cent of sales and 40 per cent of profits. But this is not big enough yet to combat tumbling hardware sales. Group turnover fell 18 per cent to £185m compared with the same period last year. And it declared a loss before tax of £4.6m 2001: £3.4m)

But the company is good at generating cash, even if it is less good than it used to be. This time around it
produce a net inflow from ops of £13.3m (2001: £29.9m). Morse ended the financial period with a net cash balance of £83.5m (31 Dec 2001: £60.3m; 30 June 2002: £90.5m). The company is to pay an interim dividend of 1p a share for the first time, reflecting both its financial strength and the fact that it is operating in a maturing IT market, the board says.

Morse also says it remains committed to replicating its business across Europe - it's big in the UK, much smaller in France and Germany, and has ops in Spain and Ireland. ®

Related stories

Morse buys AS400 house
Hardware sales carry on falling at Morse
Morse FY sales, profits down

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.