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30 Mar 2010
Nearly four in 10 of the UK’s top resellers are now growing sales at over 10 per cent, with many having successfully diversified into new market arenas, research from Plimsoll has found.
In what it described as positive news for the channel, the analyst found that 393 of the country’s top 1,000 ICT resellers are growing at double-digits.
297 of these firms are also increasingly profitable, which Plimsoll attributed to their ability to either tap into new, fast-growth revenue streams, or their being the best performer in their traditional markets.
Further reading
However, Plimsoll warned that there were two types of growth in the market - good and bad - with the remaining 96 firms enjoying double-digit growth having seen an accompanying collapse in their profit margin.
Plimsoll senior analyst David Pattison said it made a change to have positive news to report but argued these 96 firms are exceeding their reach by over-trading.
“More worrying, 14 of these companies have been loss-making for two years,” he added. “Even with double-digit sales growth, I doubt they will make it to a third."
In addition, 174 firms were given a 'Danger' rating by Plimsoll, after they were found to be losing both sales and profits.
“Time is running out and only a takeover or a rapid turnaround is likely to redeem their situation,” said Pattison.
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