DCC expects drop in earnings
DCC, the business support services group, said that trading has worsened for its IT distribution division, and it now expects single digit earnings growth in the current financial year.
In the last financial year DCC's IT Distribution division contributed 21% of the group's operating profit.
A trading statement from the company said: "The tough trading conditions experienced in DCC's IT Distribution division since late 2004 further deteriorated in July and August 2005.
"The UK software distribution business, Gem Distribution, has been particularly impacted by the sharp decline in retail consumer expenditure on technology and entertainment products in July and August.
"While it is anticipated that the games market will benefit from the forthcoming release of the Microsoft Xbox 360 console later this year, this is not expected to have a material impact in the
current financial year.
"In addition, very difficult trading conditions in the IT hardware market and continuing severe product price deflation are impacting both Micro Peripherals and Distrilogie, DCC's UK and Continental European IT distribution businesses."
