Profit falls at Northamber, but at least it made one
Tough market conditions take toll on normally bullet-proof distie
Northamber saw pre-tax profit drop 28 per cent for the year ended 30 June, but said it was doing better than most rivals. Profit before tax was £6.32 million for the distributor, against £8.81 million the previous year. Sales were down 5.4 per cent to £277.73 million. Pre-tax margin fell from 3 per cent to 2.17 per cent, with earnings per share down 31.8 per cent to 11.8 pence. Net asset value per share rose by 8 per cent to 91.8 pence, and net cash was up at £3.9 million, from £1.7 million last year, with zero net borrowings. David Phillips, Northamber chairman said: "These results simply reflect the effects of the over supplied and competitive trading conditions during the second quarter of 1999 and also the absence of the anticipated pre-millennium upturn." But he pointed out that the distributor was doing better than many of its rivals. "Our results are below those reported last year and our own earlier expectations, but compare favourably with the performance of others in our immediate sector," he stated. Phillips said there had been a "strong UK market place imbalance between forecast and actual demand", with the consequent price erosion and fall in annual sales distorting comparisons of any meaningful annual growth. The company announced Tony Caplin, non-executive director, would be made non-executive deputy chairman at the next AGM. Staff increased from 366 to 416 over the year. Regarding the future, the dire trading conditions of the second quarter now seemed to have stabilised, said Phillips. "The new trading period has started in line with our own expectations. Return on capital and margin retention will continue to remain our primary focus, with margin retention likely to be the main source of profit growth until market conditions improve further." He added that the board was confident that the company would continue to be profitable in the year ahead. Rival Datrontech posted disappointing results earlier this week, saying it would make further cut backs after losses of £700,000 for the six months ended 5 July 1999. ®
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