Keltec bemoans spending freeze as sales and profits dive
Recession-ravaged clients keeping loose change in pocket
Services-based reseller Keltec has reported a double digit drop in sales and profits for 2012, amid claims from management that some of its customers remain jittery about the economic recovery and are refusing to sign off new projects.
The reseller, headquartered in Bracknell, has filed full calendar year results at Companies House which were the direct opposite of the double-digit gains it forecasted 15 months ago.
Turnover dropped by nearly 20 per cent to £13.8m, compared to the £17.1m posted for the previous year, taking revenues down to the level achieved in 2010.
But a near ten per cent cut in operating expenses to £3m helped the bottom line decline less steeply. Group operating profit fell 17 per cent to £249,000 and net profit slipped 12 per cent to £175,510.
"The business environment continues to be challenging with customers still nervous about the economic situation," said Keltec, in a director's report.
It reckoned the reduction in turnover was mainly in the tech product space, but service provision - managed, support, and professional - boosted gross profit margins from 21 to 24 per cent.
Management did not reply to calls for comment, but in the director's report the company predicted it would enter "profitable growth" for FY'13 by farming the existing customer base and hunting for new punters.
"The business environment in which we operate will continue to be challenging. However, we believe that with what we have to offer, there is more than enough opportunity in the marketplace for delivery of a successful 2013 and beyond," the director's report added. ®