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Author: Cornelia Wels-Maug
28 November 2006
Today, German IT services player PC-Ware announced interim results for Q2 and H1 ending 30 September. Revenues were €152.3 million, up 22%, with an EBITDA margin of 1.3%, slightly down from 1.4% year-on-year. EBIT was up 15.4% at €1.1 million and EBT increased by 176.8% to €1.1 million with net profits of €0.7 million compared to -€63,000 in Q2 of 2005.
PC-Ware grew across all three business segments: software sales and licensing were up 24.6% at €110.9 million; system house work was up 15.7% at €35.8 million and Professional IT Services were up 20.5% at €5.6 million.
Comment: PC-Ware managed to grow revenues even during the traditionally calmer summer period. The growth was certainly helped by PC-Ware's recent acquisition: in Q2 it consolidated Danish Ravenholm Computing Group (see EuroView Daily Comment 22 November 2005), which accounted for about 50% of PC-Ware's revenues increase, with sales of €12 million. Another important growth area was PC-Ware's international expansion strategy; foreign business now accounts for 55% of total business, up from 39% in the comparable quarter of the previous year. This proves even more valuable as revenues from the German home market suffered a 10% decline year-on-year, partially due to delays in closing key account contracts.
Growth in its gross profits outpaced its overall revenue growth, primarily due to its move towards higher-valued IT Services (via acquisitions), which already account for 27% of overall sales. However, its EBITDA margin fell slightly, mainly due to the increase in staff as a result of the consolidation of the Ravenholm Holding, as well as integration costs for the IT Services house Senas AG. However, both of these should be short-lived.
PC-Ware, as one of the top five IT System houses in Germany, is not alone in the strategic turn towards IT services. Cancom IT Systems is increasingly shifting its portfolio towards IT services, as well as Bechtle AG, which is now even offering managed services. All are reporting increased profitability in the period June to September as a result of this strategic move.
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