Demand for computer security has driven strong growth at the German subsidiary of computer services firm Fayrewood, in which Irish entrepreneur Mr Pierce Casey is major shareholder and chairman.

The e-security division of Computerlinks, which is listed on the Frankfurt Stock Exchange, saw turnover rise 26.6 per cent in the first quarter of 2004 to €38.9 million.

Overall, Computerlinks reported a 17.4 per cent rise in sales to €49.48 million. Gross margins have recovered to 18.6 per cent in the first three months of the year, from 17.3 per cent in the same period last year. In the first quarter of 2002, gross margins were 19.3 per cent.

Pre-tax profits were 13.8 per cent ahead at €2.38 million, with earnings per share 13.6 per cent ahead at 25 cents.

Computerlinks chief executive Mr Stephan Link said the "impressive" growth underlined the group's successful business model.

"Despite the sluggishness of the economy as a whole, there is an upturn in the IT industry," he said.

Computerlinks markets and distributes e-security and e-business products. It operates mainly in the German, French and British markets, but also has offices in Ireland, Switzerland, Italy, Hungary and Austria.

E-security constitutes a growing part of the business with sales in the e-business division falling to €9 million from €10.1 million a year ago.

The smaller professional services division saw moderate growth, with turnover of €1.6 million, up about €200,000 on the year-ago period.

Computerlinks remains the smaller of AIM-listed Fayrewood's two businesses. The larger part distributes computers, peripherals and software, with subsidiaries in France, Spain and the UK.

Fayrewood, which owns 51 per cent of Computerlinks, had 2003 sales of €639 million with profit before tax and goodwill of €18.8 million.