Financial research broker Goldman Sachs is warning investors to be cautious before investing in Azlan, rating the distributor?s stock from neutral to market underperformer.
In its report, Goldman Sachs stated: ?Investors will need significant reassurance and a lengthy period of better operational performance before looking positively at the stock.
?We see Azlan as a show-me stock that faces a long, hard road to credibility, which cannot be accelerated.?
Azlan?s shares were suspended due to ?accounting irregularities? in June. Chris Martin, group director for field operations at Azlan, said: ?Clearly the suspension of shares has had an impact, but we have a prime position in a healthy market.?
The report also claimed that Azlan?s gross margins of 24 per cent ?have been maintained due to a lack of specialist knowledge among Vars of cutting-edge networking products?.
Martin said the skills shortage was an ongoing feature of the market. ?The Azlan model of moving to emerging technologies will help us to sustain good margins,? he insisted.
Regarding the changes to Azlan?s board (PC Dealer, 23 July), Martin said he was reporting to Barrie Morgans in his role as group CEO, with particular responsibility for vendor relations and training. Martin conceded that the management had done a better job achieving growth than in managing it.
Goldman Sachs said it has not yet revised its figures because of ?the lack of reliable guidance Azlan can give at present?.
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