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Profits sink at Logicalis, UK captain no where to be seen

Press-gangs still on prowl for new local boss, vendors chucked overboard

4 arrows signs in arrow on wooden wall

Not having a permanent UK leader in place amid the wider senior personnel changes at Logicalis is still - unsurprisingly - taking a toll on the bottom line.

The company is now recruiting a boss for the British subsidiary following the resignation of Ben Gales, who quit after six weeks - it took seven months to recruit him. Other execs also moved on last year across the sales floor and services department.

In the period from March to the end of December, Logicalis sales slipped 1.9 per cent to $1.3bn, “mainly as a result of the strengthening US dollar and lower contribution from emerging markets,” parent company Datatec said today.

Gross margins went up as they were “less affected” by the volume transactions in the US. But the group added:

“The weakness of the Brazillian Real in particular and the reorganisation of Logicalis UK impacted operating profits.”

The exact hit on profits was not detailed by Datatec, and neither was the overall margin. The UK is Logicalis' biggest market in Europe but Brazil represents its biggest territory worldwide.

Logicalis is in rebuild mode following the loss of its biggest contract in the UK to BT - the PSN deal with the Welsh government. The powers that be are executing a “transformation” programme to more effectively sell cloudy infrastructure services.

Rationalisation of the vendor portfolio was executed last year as Logicalis went back to basics, concentrating on fewer big bets including Cisco, HPE, IBM and NetApp.

Parent company Datatec, which also houses distributor Westcon, said group sales of $5.5bn were 1.8 per cent higher than a year ago. Westcon contributed $4.2bn, up 3.1 per cent year-on-year.

Gross margin was Westcon dipped to 10.1 per cent versus 10.3 per cent a year ago.

Matt Stevens is currently running Logicalis UK but a permanent successor is expected to sign up before next month… at least that was the original plan. ®

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