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Northamber suffers 'most disappointing' H1

Distributor says that due to market uncertainty, a near term return to profit unlikely, but remains optimistic about mid to long-term outlook

Northamber warned that it sees ‘no near-term return to profit’ as it reported increased half year losses for the six months ended 31 December 2015.

The beleaguered distributor reported that pre-tax losses increased to £547,000, compared to losses of £292,000 in the previous year.

Revenue stood at £32.5m, down from £35.7m in the year-ago period.

Chairman David Phillips said investments in staff training and a refocusing of areas of profitability helped to improve margins somewhat, but admitted that this was not enough.

“Steps taken to increase the skill levels of our staff did serve to spur the achievements of our planned strategy and our actions to concentrate in more profitable areas resulted in consolidating margins with a slight improvement, compared with the first half of last year, rising from 6.8% to 6.9%,” he said in a statement.

“Those improved margins were not sufficient, however, to compensate for the higher staff costs and comparative loss of turnover, such that the gross profit line was some £198,000 less than the £2.4 million achieved in the first half of the comparative period.”

"Across calendar 2015 the progress in revenue growth was positive with a 9.4% increase in the second calendar half, despite the Windows 10 hiatus shared in my last report and slow commercial sector acceptance," he said, adding: "Management actions taken for the longer term resulted in the less satisfying second half 2015 statistic, with year-on-year comparatives some 9.0% lower at £32.5 million compared with £35.7 million."

Phillips admitted that this was ‘a most disappointing short term result’, but added that ‘there should be further benefits accruing from this strategy over the medium term’.

“With the current marketplace uncertainties it is difficult to indicate a near term return to profit. We are confident in the medium and long term of delivering profitability due to already evidenced underlying growth, supported by our strong financial position and infrastructure.” 

Shares fell 12% following the earnings report, before rebounding ever so slightly. The price currently stands at 31.85 pence per share. 

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