Latin America remains the largest region continuing to be driven by further expansion of communications and network infrastructure. Logicalis now operates in 10 countries across Latin America from Argentina to Mexico but with Brazil still by far the prime operation.
In FY 2013, Europe comprised mainly the UK with only a small element of the 24% derived from Germany. In the next financial year however, Europe will make up a higher proportion, following the acquisitions in Spain, Ireland, the Netherlands and the Channel Islands.
Logicalis improved its services-to-product revenue mix with services now approaching our longer term target of 30% of total revenues.
Revenue from total services grew by 14% and the largest driver of this has been our managed services activities. In FY 2014, our annuity revenues are planned to exceed $250m.
The improving services mix has been a major contributor not only to margin stability but also to improved predictability of business in the current challenging economic environment.
Cisco remains the most significant vendor partner for Logicalis, providing not just networking equipment but solutions for data centres (such as servers and switches), security and collaborative voice and video applications.
Our IBM revenues are expected to grow in this financial year based on the acquired 2e2 businesses in Europe, but overall the vendor product solutions mix remains steady as we continue to focus as a system integrator on enterprise networks and IT solutions for data centres.
Overall the gross margin percentage reached 23% of revenues and with good margin management showed a positive upturn in every region except Asia Pacific.
The change in Asia Pacific was attributable to the product and services mix, as the region has been expanding by increasing product sales to the enterprise market and growing the business in Indonesia.