Hear that screeching sound? It's the sales brakes on distie juggernaut DCC Tech
Disappearing demand for tabs, notebooks and smartphones fingered
The wheels have slowed on the distie juggernaut Exertis and mobile computing is to blame, Irish parent DCC confirmed today.
In a trading update for Q1 covering the three months ended 30 June, DCC Technology which comprises Brit subs Exertis and Gem, revealed things aren’t quite going to plan.
“Trading in DCC Technology was behind budget and the prior year. As anticipated, the business in the UK continues to be impacted by the weak tablet market and by reduced sales of mobile computing and smartphone products of one large supplier,” it stated.
The one large supplier is likely to be Samsung, say sources, because Sammy has taken direct a number of hefty mobile phone sales contracts with retailers. Exertis used to provide the logistics or "fulfill" them.
But Lenovo is understood to have played part too - Lenovo was caught out by the slowdown in demand that led to an inventory pile-up across Europe, and caused sales-into the channel to fall for the first time in years, according to prelim Q2 stats from Gartner.
“The UK business was also impacted by weaker demand and increased competition across a number of product sectors,” DCC added.
DCC is one of the biggest, if not the biggest, disties in Britain, and kept on growing through the recession and economic downturn. While others struggled to put on the pounds, it has pushed up the numbers by acquisition and organic growth.
In fiscal ’15 ended 31 March, DCC Tech turnover moved up 3.8 per cent y/y to £2.35bn, and around 79 per cent of business is done in the UK and Ireland. Operating profit was £49.3m, up 2.6 per cent.
The company has since added Computers Unlimited to the stables.
Beanies at Gartner estimate 11 million devices will be shipped into the UK this year, down 11 per cent on 2014, but while traditional PCs are forecast to keep falling, ultrabooks, tabs and smartpohnes are expected to pick up again next year. ®