A higher mix of services sales bolstered profits at Specialist Computer Centres (SCC) but weak demand for hardware and software were responsible for a slide in turnover.
The services-based reseller saw profits after tax rise 25% to £6.3m in the year ended 31 March 2010 as revenues fell 4.3% to £489m.
"Despite the tough market competition, services margins were maintained as effective cost management reduced direct headcount costs during the year," said big cheese Sir Peter Rigby in a director's statement.
Product sales dipped 7% but services revenues grew to represent 22% of turnover up from 20% a year earlier, while gross profit percentages climbed from 13.6% to 14.1%.
During the 12 month period, restructuring costs were close to £1m as the total headcount fell 5.5% to 1,898 including a 16% reduction in sales staff, and a 5.5% fall in engineering bods.
Rigby added: "The company is engaged in an ongoing review of direct costs to maintain margins and improve competitiveness."
In the year, SCC acquired a leasehold building based in the Midlands from fellow subsidiary Prime Property Developments, it continued the construction of a data centre on the site at a cost of £2.8m.
The Tier 3 data centre - which will be government security rated and iSO27001 accredited - should be completed this month at an additional cost of £8.5m, of which £8m has been committed at the current fiscal year-end.
The data centre transformation business at SCC was further augmented last month with the acquisition of HP Gold partner Kavanagh.