Why did Insight Enterprises Inc, the Tempe, Arizona-based computer direct marketer, last month pull out of its $135.3m take-over of Action Computer Supplies Holdings Plc, an acquisition it said was key to its further expansion into Europe? One reason is that it may have had a sniff of the figures that the Middlesex, UK-based IT products distributor was to produce for its financial year to August 31. Net profit was 1.1m pounds ($1.9m), down from 4.1m pounds ($6.8m) on revenue that rose 10.8% to 276.5m pounds ($256.2m). Earnings per share are down 69.5% to 3.6 pence.
Action, which boasts the most productive base of IT users in the UK with 140,000 customers placing more than 550,0000 orders a year, has been hit by a Y2K slowdown in spending. It expects a gradual recovery during the first quarter of the new year. Despite the Insight experience, directors at the company say that opportunities to consolidate US and European IT catalog and web companies still exist, though they plan to return to their objective of outperforming the market.
