Tough economic conditions hit Phoenix bottom line

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Tough economic conditions hit Phoenix bottom line

Simon Quicke

The tough economic climate and longer sale cycles have taken their toll on the bottom line at Phoenix IT Group with its half year results showing a drop in revenue and pre-tax profits.

In an interium set of results the channel player reported revenues of £132.3m, compared to £138.4m in the same period a year before and underlying pre-tax profits of £14.5m down from £15.1m.

The firm was relatively upbeat pointing out it had a number of long-term contracts and it had made changes to its internal structure to enable it to get a greater focus on emerging areas including cloud computing.


David Courtley, chief executive of Phoenix, described the results as "satisfactory" and in line with the board's expectations and pointed out it had been working hard to maintain margins and control costs.
 
"Operationally we will remain focused on improving service to our customers, increasing our share of target markets and growing our base in hosting and Cloud services," he said.

"The challenging macroeconomic environment and longer sales cycle have impacted the rate of new business wins in the last few months.  Consequently the Board's current expectation is for a second half result in line with the first half of the current financial year," he added.

One of the main changes the infrastructure specialist is making is to unify its structure into one body to take advantage of the opportunities that come from cross-selling across a wide product and services portfolio.
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