Poor market conditions were reflected in uninspiring interim financial results released by distributor Northamber and corporate reseller Morse.
Northamber reported turnover of £119.3m for the six months ended 31 December 2002, compared with £118.4m for the same period in 2001. The distributor posted a loss of £330,000 compared with a loss of £79,000 the previous year.
Despite the increased loss, the firm remains debt-free and has cash reserves of £3.3m. Chairman David Phillips said in a statement that the firm had taken steps to "significantly reduce costs", cutting staff from 415 to 317 during the year.
Phillips said the firm has seen group overheads increase as it put money into supporting trading levels and growth expectations in newer, more profitable areas. One of these areas includes NV3, Northamber's specialist distribution arm, which is aimed at the converged IT marketplace.
Phillips remained cautious about the future. "Within an uncertain and higher taxed economy, any short-term market recovery is unlikely," he said.
Separately, value-add reseller (VAR) Morse revealed an 18 per cent decline in turnover to £185.8m for the six months ended 31 December 2002, compared with £226m the previous year. The VAR revealed a loss of £8m compared with £6.1m last year.
Morse's professional services division grew by 12 per cent, contributing 40 per cent of the group's gross profit, while its infrastructure unit fell by 27 per cent. The firm remains cash positive with a balance of £83.5m.
Morse chairman Richard Lapthorne said trading conditions had not improved.
Judith Jordan, analyst at Ovum-Holway, said: "Morse must be patting itself on the back for moving into services when it did. Its rising revenues have helped to offset the decline in its infrastructure business."
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