Northamber's sales slumped more than 10 per cent annually over the last six months, but the firm said this was intentional, as it moves away from lower-margin business.
Northamber's sales fell 10.7 per cent annually to £29m for the six months to 31 December, while net losses narrowed to £539,000, compared with £547,000 the year before.
Chairman David Phillips said it is "a little disappointing" to report a "timing mismatch in progress", but insisted there are positives in the results.
"There was an intended reduction in turnover from realigning activities, particularly away from lower-margin business," he said.
"This strategy resulted in an improvement in the gross profit for the period of £2.25m, an 11.5 per cent increase in margin, from 6.9 per cent a year ago to 7.7 per cent this year; in sector terms, this is a considerable improvement. This achievement has been somewhat offset by the longer than anticipated time frame needed to reduce identified overheads.
"Commercial trading pressures on values affected too many of the volume product ranges dealt with by the company. To offset this, we have been progressively expanding another better margin product support service offering to our customers. This service has proved to be popular and revenues have nearly doubled over the comparative period last year and continue to grow. This offering complements our other activities, particularly as it is a low-cost operation and provides a very useful net income stream, albeit the gross margin opportunities are not as rewarding as with the more technical software products."
Phillips said he is now moving into a new role at the firm.
"As I am now in my 73rd year and blessed with some of those unwanted encumbrances of age, it is clearly time for me to take a non-executive role," he explained. "Happily, the support of an established and strong operations board makes this viable, in conjunction with the active search for a strong finance director, which we have commenced."
He added that staff "continue to deal with the problems of the industry with remarkable resilience" but reiterated that it might take time to return the company to profit.
"We are striving to return the company to profitability, but the sector obstacles are severe, as evidenced by further recent consolidations at the topmost levels," he said. "Progress is being made in certain areas, only for such gains then being dissipated by matters beyond our control. Nevertheless, in those areas where we are making significant progress, we have hopes that this can be accelerated and at the same time the problem areas reduced. As previously cautioned, to reach positive returns may take some patience."
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