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Tech Data says market share gains helped boost Q4 numbers

Microscope contributor

Tech Data reckons it captured or held market share across all product categories in Europe during its fiscal Q4 which helped it record sales and profits gains.


After four consecutive quarters of declines, revenues for the period ended 31 January went up 10% year-on-year to $6.3bn (£4.3bn) and income went up 22% to $70.1m (£46.7m).


Sales in Europe - accounting for 60% of Tech Data's overall revenues - increased 12.3% in the quarter or 1.5% in local currency to $3.78bn, while turnover in the US grew 6.7% to $2.5bn.


"In Europe we continue to gain share in selective markets," said CEO Bob Dutkovsky, who reckoned sales across the region last year were down by as much as 20% while Tech Data shrank just 4%.


Demand remained "spotty" in Europe he said but the downturn had bottomed out in the third quarter "and we expect the positive momentum to continue".


The focus on Return On Capital Employed was one of the distributor's reoccurring themes for 2009 - it stood at 13% - and Dutkovsky said growth was "balanced" across all product segments.


He said Tech Data will "invest heavily in the sales force and the sales process" this year.


However, the firm hinted it was prepared to walk away from low margin deals as it diversified into new areas including the data centre.


"There is business that we will not retain in our portfolio, that we are going to allow others to potentially fill up their credit lines with profitless proprietary," said Jeff Howells, Tech Data CFO.


"We have a very clear approach that as we find, source and serve new customers there will be business that we no longer [fulfil]," he added.


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