Zycko UK accepted a sales decline during FY11, as it trimmed and restructured its operations to deliver greater margins. Profit was also the watchword at a group level, with the bottom line growing at almost double the speed of the top line.
Accounts for Zycko Ltd, filed with Companies House this week, show that turnover for the year to 31 March 2011 declined 9.3 per cent to £83.9m, but operating profit grew almost 17 per cent on last year to £2.7m.
The directors' report for the year explains that the business underwent a restructure during FY11 which led to the decrease in sales. But gross margins were up from 9.3 per cent in the preceding year, to 11.6 per cent this time out.
"During the year the company conducted a review of its business activities to better align to the core activities of the business and transferred stock and fixed assets to other group companies, along with a realignment of staff to the respective companies," said the report. "This has subsequently led to a reduction in turnover."
During FY11 Zycko Ltd generated sales of £47.1m in the UK, almost £31m in the rest of Europe, and £5.8m in the rest of the world. Two areas to see a shake-up as part of the reshuffle were staff numbers and employee and director remuneration.
Average monthly management and administration headcount fell from 40 to 23 over the course of the year, while sales and marketing numbers dropped from 46 to 43.
Meanwhile, logistics was completely hived off to another group company, with headcount dropping from 21 to zero. Zycko Ltd's overall wage bill dropped from £5.3m to less than £4.5m, while the total boardroom pay packet decreased from £432,000 to £248,000.
The Zycko group parent company, The Simian Group Ltd, saw sales increase 7.5 per cent to £138.4m, with operating profit rising 14.6 per cent to more than £5.8m. About two fifths of sales were generated in the UK, with 45 per cent generated in Europe, and 15 per cent emanating from the rest of the world.
Simian Group is the parent company for incorporated Zycko operations in the UK, Germany, France, Norway, Italy, Spain, South Africa, Russia and the Netherlands. Also under its ownership is online hardware and accessories distributor Hardware.com. During FY11 total staff numbers rose from
268 to 311.
Simian's directors' report for the year reveals that it recently agreed a three-year €25m asset-based lending facility with Fortis Commercial Finance. The report strikes an upbeat note about future opportunities.
"Despite the difficult economic conditions, the directors are confident – with the business plan in place – that the group will deliver another strong set of results during the next financial year."
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