Lenovo mulls acquisitions after Aussie profits spike

Lenovo Australia & New Zealand has pointed to strong channel relationships and diverse product offerings as it grew profits 68 percent.

According to its full-year results to 31 March, its pre-tax profit was $3.21 million, up from $1.96 million year-on-year. The company's total revenue fell 14.6% to $332.1 million, down from $388.7 million last year.

However, the company posted a $6.3 million after-tax loss, largely due to a $10.6 million charge for "de-recognition deferred tax payment".

Lenovo ANZ would not comment specifically on the results, however, this charge was thought to be a tax minimisation strategy.

Lenovo ANZ managing director Matt Codrington said: "Globally and in Australia and New Zealand the PC market is flattening, there's no doubt about that.

"But the computer market still is extremely relevant; it's a $300 billion market," he told CRN.

One way the company is responding to the slowdown in demand is by producing hybrid computers, which combine notebook functionality with tablet practicality, such as the ThinkPad Twist and the ThinkPad Convertible.

"We've had a number of really innovative products come to market in the last 12 months," Codrington said.

"The 'PC Plus' era, such as tablets and convertibles, has driven some differentiation for the partners to sell more solutions."

Lenovo is looking at different investments that could add value to the company's 'PC plus' portfolio. It is considering releasing Lenovo's smartphones in Australia.

"In terms of smartphones, we are globally the fourth-largest smartphone vendor in the world. We have to roll out smartphones in the right regions at the right time."

Growth could come from other avenues too, said Codrington. "We are definitely in the market for acquisitions."

CRN asked Codrington if Lenovo was considering acquiring BlackBerry, but he declined to comment.

Instead the company is evaluating cloud opportunities as it looks for a solution to "drive PC Plus expansion".

Close relationships with channel partners have helped Lenovo grow for every one of the past 16 quarters and become a tier one PC vendor, he said.

"It's tougher and tougher to sell a box [PC] and make margin. We offer channel partners programs around finding new business. From the first dollar they spend, they're earning rebates," Codrington said.

[Related: Why Lenovo isn't afraid of Apple]