Top Avaya partner Sabio slumped to a six-figure loss in its 2013 fiscal year, despite a top line that continues to grow by double digits.
Recently filed accounts for the year to 30 September 2013 reveal that the Southwark-based VAR's turnover rose 12.7 per cent to a little more than £28m. The company has grown its revenue in excess of 10 per cent in each of the last three years.
However, the cost of a short-lived sortie into Germany coupled with a decline in underlying profitability saw Sabio post a net loss of £102,000 in FY13, compared with a profit of £134,000 in the prior year. Consolidated operating profit from continuing operations came in at £394,000, less than half the £866,000 figure of FY12.
The impact on the operational bottom line of a brief, unsuccessful attempt to establish a direct presence in Germany – between September 2011 and October 2012 – stood at £354,000, although this was significantly down on the £866,000 costs incurred the previous year. Total shareholders' funds across the group also suffered a rollback in FY13, declining from £784,000 to £685,000 over the course of the year.
Despite its troubles in the DACH region, Sabio increased its FY13 sales in continental Europe by 42.7 per cent to more than £4.2m. Asia-Pacific revenue – derived from an autonomous operation in Singapore – was nigh on flat at £2.08m, while sales in its home country rose 11.3 per cent to £21.8m.
Average monthly employee numbers grew from 156 to 167 over the course of the year, and the company's total wage bill spiked by more than £1.5m to £12.5m. The directors' report sounds an upbeat note about Sabio's future prospects.
"The external commercial environment is expected to remain competitive; however, the directors remain confident that the company will be able to build on its current level of performance in the future," states the report. "The company's products and services deliver a strong return on investment to its customers, typically through improved efficiency and a reduction in overheads.
"In the current difficult economic climate, the company's activities focus on these returns on investment to ensure it continues to deliver strong sales from a cost-conscious market and customer base. The ability to target sales into customers and markets seeking opportunities to improve efficiency and reduce overheads, coupled with a strong mix of long-term customer support contracts across a diverse portfolio of industries, mean that Sabio is ideally placed to deal with the current economic conditions."
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