Fayrewood blamed a rise in expenses at its UK distie for sinking into a net loss for the year to April 30.

But the networking distribution group said that costs are back under control at Interface Systems International, with a new management team in charge. There's a way to go before it returns to profit but losses are reduced sharply (-£1.3m for this FY). France and Spain are trading profitably as is Computerlinks of Germany, in which Fayrewood holds a 50.1 per cent stake.

The group's net loss or (i.e. earnings after bad stuff, goodwill amortisation, paying the tax bill and the like) was £1.2m(2001: £505K profit). Operating profit, before amortisation of goodwill fell to £6.3m, compared to £10.1 million last year.

Group revenues were up 7 per cent on a like-for-like basis to £279.4m and 19 per cent to £311m when new acquisition UMD SA of Spain is thrown in to the pot.

Fayrewood issued a profits warning in April, alerting the market to the poor performance of its UK sub.