The management of data growth is becoming increasingly important for businesses with the influx of the Internet of Things (IOT), artificial intelligence (AI), and social media. While cloud computing offers a convenient way to handle big data, it requires regular maintenance of the system and upgrading of hardware to ensure serviceability.
That’s where companies rely on Procurri Corporation (SGX Code: BVQ), listed on the Singapore Exchange since July 2016, to fulfil their IT services and hardware needs for their data centres. Procurri generates its revenue by providing lifecycle services, which include distribution of refurbished and new IT hardware, IT disposition services to dispose of faulty and defunct equipment, and professional maintenance support services on major IT brands.
In short, Procurri has created a sustainable IT ecosystem that provides end-to-end support for all IT services and hardware needs for more than 100 companies around the world. This allows its clients to enjoy better cost savings, flexibility, and peace of mind as their single IT vendor.
Here are 5 things to know about Procurri Corporation if you are interested in the IT lifecycle services industry.
Describe Procurri’s main business segments, segment drivers, and margins.
Procurri is a global provider of lifecycle services for data centre equipment. Its business segments are split into:
Hardware, Lifecycle Services and IT Asset Disposition (Lifecycle Services) (80.4% of FY22 revenue) includes refurbished IT hardware, distribution of new hardware, professional services associated with data erasure, installations, imaging, lifts and shifts of IT hardware as well as modern workplace management involving global deployment of IT assets and IoT devices.
Third Party Maintenance (19.6% of FY22 revenue) includes rendering of IT maintenance services, sales of maintenance parts and professional services tied to systems on renewable contracts.
In 2022, Procurri reported a gross profit margin of 26.1%, with the Lifecycle Services segment accounting for 24.1% and the Third-Party Maintenance segment accounting for 34.2%.
The Group anticipates future business to be driven by the increasing demand for reliable maintenance and support services for complex data centre equipment as well as solutioning of complexities associated with hybrid working environment post-pandemic.
What are some of the Group’s potential catalysts that investors can be excited about in the near term of 1 to 2 years?
Procurri’s growth strategy for the next 1 to 2 years is focused on expanding its Lifecycle Services and Maintenance offerings while also increasing its presence in the Asian market, particularly in Japan. The company plans to leverage the network of its major shareholder, DeClout Pte. Ltd., to achieve this goal.
In addition, Procurri is expected to benefit from the conclusion of its cost rationalization program, which includes the consolidation and relocation of its facilities. By improving efficiency and reducing costs, the company aims to enhance its profitability and competitiveness.
Procurri is an attractive investment opportunity for those looking to capitalize on the growing demand for sustainable solutions, driven by both environmental concerns and economic pressures. With a new generation of management and a focus on cost-cutting measures, Procurri is well-positioned to succeed in the market.
To what extent is the Group capitalising on new norms and trends that could be game-changers for it in the future?
Procurri is well-positioned to leverage the growing trend towards sustainable IT consumption, reuse over recycle. With an impending time of austerity on the horizon with global rising interest rates, the Group anticipates stronger demand for greener, cheaper, and more flexible IT solutions.
Furthermore, the Group’s capability to deliver solutions from its carbon-neutral certified, global facilities is an advantage that places it in a prime position to benefit from these new norms and trends.
What is Procurri doing to fulfil your sustainability commitments?
Procurri is committed to promoting sustainable IT consumption and has achieved carbon neutral status for its global operations across 3 continents.
We have made a commitment to achieve the following by 2025:
- Reducing energy consumed as a percentage of revenue by 1% year on year
- Increasing renewable sourced electricity
- Saving 2 million kgs of CO2 emissions through offering alternative solutions and promoting low or carbonneutral devices
- Diverting 10 million kgs of technological waste from landfill between 2020 – 2025
- Operating on a carbon neutral basis
Procurri also offers thought leadership on carbon offset reporting. We offer detailed methodology and thought process to help clients in their sustainability process as well as accurately collate and report ESG data (including carbon offsets). More details can be found on Procurri’s sustainability website.
Through working with Procurri, clients will be able to make better informed decisions about the disposal of their hardware, identify key ESG metrics to report on and be assured of best practice surrounding secure data eradication and reporting of legacy data.
Why should investors take a closer look at Procurri?
We believe that Procurri presents an attractive turnaround story. In 2022, the company underwent a management reorganisation, which saw experienced line managers taking charge to steer the group through the challenges of recent history, including the pandemic.
Procurri implemented a major cost rationalisation programme under the new management team in 2H2022, consolidating facilities and offshoring the first level network operations team to more strategic and cost-efficient locations. This has resulted in an immediate positive impact on the company’s bottom line.
The demand for sustainable IT enterprise best practices continues to accelerate, coupled with tighter governance for IT asset disposal. This has increased demand for Procurri’s IT lifecycle services suite of solutions. Procurri is optimistic that current macro trends such as global inflation are likely to result in clients seeking IT asset lifecycle extension and deferring capex for new IT replacement which will further drive demand for Procurri’s maintenance services.
Moreover, Procurri is excited about growing its market share in Asia with the support of new major shareholders and parent company – DeClout and Exeo Group, which has a major presence in the Japanese market.
Overall, management believes that Procurri presents an exciting opportunity for investors seeking to benefit from a global shift towards greener solutions. Together with the aforementioned factors, we believe that we operate in a favourable environment for future growth and expansion.
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 4 April 2023 and have been republished with permission. You can read more on Centurion Corporation on the SGX website.
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