IT firm Softline expects turnover to decline in major market Russia (updated)

Noventiq Holdings

24/05/2022 13:23

(Adds Softline spokesperson comment on Russia divisions)
    May 24 (Reuters) - London-listed IT firm Softline  SFTLq.L 
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.  urn:newsml:reuters.com:*:nASM000CZL
    Softline, which works closely with Microsoft  MSFT.O ,
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)