Lenovo Delivers Record Profit As Gaming, Consumer & B2B Booming During COVID-19
Lenovo has doubled their profit to $6.15 million for the year ending March 2020, with the brand pushing further into the gaming education and B2B markets and looking for new growth, according to CEO Matt Codrington.
In 2019 the business, which now includes IBM servers, reported a $3.37 million profit across their Australian and New Zealand operations, since then the company has expanded their consumer offering with several new smarthouse products, as well as smart light bulbs, speakers, smart power boards and RF controllers.
According to Codrington, his consumer business is up between 25 and 28% with the last quarter surging 30%, the big problem for Lenovo and other PC brands is stock levels.
He said that when the impact of COVID-19 hit some retailers “ramped up faster than others” and that they were now reaping the benefit of their actions.
“We have fought for stock” said Codrington who believes that supply will be tight for several months.
He said “Our commitment and investment we have made in consumer in gaming is starting to reap benefits this quarter” he said.
ChannelNews understands that the company has been investing in the gaming community and this investment is paying off with a significant lift in sales.
According to Lenovo’s latest financials the company has lifted their marketing spend in the region by over $20 million dollars during the past 12 months.
Total investment taking into account payments to retailers, distribution and external marketing was $89.4 million Vs $69.76 Million in 2019.
The company has also expanded their instore presence with additional rebates for retailers as well as O&A payments that appear to have delivered results.
Revenue jumped from $799M in 2019 to $928 million in 2020 the company also moved to hire additional staff from their competitors in an effort to expand their education and gaming market share.
Codrington said that his B2b business was up over 20%.
The company did not pay out a dividend during the financial year and does not recommend that one be paid.
Lenovo ANZ says that following COVID-19, the company has not been significantly impacted by the pandemic.
In their ASIC filing the Company said.
“However, the situation is unprecedented and we will continue to pay close attention to the potential implications of the pandemic and the impact on the operations, which may include disruptions to the supply chain, availability of employees and changes in customer demand.”