Azlan looks set for a useful windfall following a European Court of Justice ruling over the classification of data networking equipment for importation duty purposes.

The networking distributor today said that "in anticipation of this ruling (announced in May this year) we submitted material prospective claims between 1998 and 2000. None of these claims have been recognised in our financial statements."

In 1994, the EC classified data networking goods as telecommunications products, imposing a higher duty rate. The EC changed its mind last year - Azlan argues that it has overpaid duty between March 1995 and December 1999. As a big distributor of networking equipment, the company stands to clawback millions of pounds, if its claims are accepted.

The news comes on the back of a good set of half yearlies today with sales up 14 per cent to £298.3m and profit before tax (PBT) up 48 per cent to £8m.

Revenues were flat in the UK, but continental European sales were up, especially in Spain and Italy - mainland Europe now accounts for 73 per cent of turnover (2000: 69 per cent).

Azlan also demonstrated good cash management over the period ending 30 September 2001 with net cash inflow of £9.1m (2000: net cash outflow £4m). The company now has net cash of £6.7m (2000: £2.4m) and net assets of £71m (£65.1m). It also announced a new £60m three year bank facility.