IT firm Softline expects turnover to decline in major market Russia
(Reuters) -London-listed IT firm Softline said on Tuesday turnover in its major market, Russia, would likely shrink from April to June due to ongoing uncertainty, but was confident of double-digit growth elsewhere.
Reporting results for the full year ended March 31, Softline, which provides digital solutions, hardware and cloud services, said turnover grew 22% year-on-year to $2.2 billion in reported currency.
Softline, which works closely with Microsoft, withdrew its business outlook in March, but on Tuesday gave guidance for the three months from April to June, saying it expected year-over-year turnover growth of at least 15%.
“In Russia, the company expects growth to decline at least mid-single digits year-over-year based on the continued uncertainty in the market,” it said, adding that it expected the business, including its Russia operations, to deliver positive core earnings.
Headquartered in London and operating in 60 countries, Softline’s primary market is Russia, accounting for 51% of turnover for the full year, the company said.
Softline has been at pains to downplay its connection to Russia, especially in the wake of broad-ranging Western sanctions on Russian companies over Moscow’s stated “special operation” in Ukraine.
“Softline Holding PLC does not consider itself to be an entity owned by or acting on behalf or at the direction of a person connected with Russia,” it said in early March.
Russian founder Igor Borovikov is a tax resident of Portugal.
Softline this month said its Russian and non-Russian businesses now differ significantly in operations, priorities, and go-to-market strategies and it is exploring options to adjust the group’s assets and ownership structure.
Softline on Tuesday denied a report by Forbes Russia on Monday that Softline was planning to cut salaries at its Russian operations by 25% and adopt more performance-based targets.
Chief Operating Officer Sergey Chernovolenko said all companies operating in Russia should be adjusting their approaches in the current circumstances and said staff numbers were not being reduced.
The company said it planned to reorganise one of the divisions in the Russian office in the near future.
“In some divisions of the Russian office, directly or indirectly related to sales, in order to strengthen the focus on results, it is planned to change the structure of employees’ income, in which the bonus part will increase,” a spokesperson said.
(Reporting by Reuters;Editing by Bernadette Baum)