Northamber blames Vista for sales drop

Broadline distributor Northamber has blamed “slow acceptance” of Microsoft Vista for an 11 per cent drop in annual turnover.

Revenues for its fiscal year to June 30 hit £182.2m, compared with £204.4m a year earlier. Pre-tax profits improved 37 per cent to £590,000.

Northamber admitted its top line was also hit by the weaker dollar as price deflation impacted key volume product areas.

The credit crunch and lengthening vendor lead times provided further obstacles during the period, according to David Phillips, chairman at Northamber.

“Trading conditions required a necessary further strengthening of our monitoring of customer and stock profiles to avoid either excessive or unrewarding credit or stock risks,” said Phillips.

“Increasing levels of sector bad debt show our own controls to have served us well with a bad debts charge of less than 0.07 per cent of sales for the year [compared to 0.10 per cent in 2006].

Phillips continued: “Longer lead times with so many vendors both sourcing and shipping from China reduced stock turns to 14.5 from last year's 21 times and affected optimised returns. This translated into a contributory cause for the 0.5 per cent reduction in gross margins.”

However, Phillips ended on a positive note, claiming that trading in the early months of Northamber's fiscal 2008 were up on the previous year.

“Subject to the state of the economy as a whole and our own performance within
our sector, your board is cautiously confident in the outcome for the new
trading year,” he told shareholders.

Further reading:

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Northamber laments difficult sector trading