Avnet UK back in the black during FY10
Distributor enjoys sales spike and return to profitability following 2009 cost-cutting restructure
Distribution giant Avnet enjoyed a robust 2010 fiscal year in the UK, returning to profitability and posting a double-digit sales spike.
For the 12 months to 3 July 2010, the UK-registered operation of the distributor's Technology Solutions (TS) arm saw revenue increase 10.2 per cent to £227.96m. Results recently filed with Companies House reveal operating profit for the year stood at £1.54m, compared with a £5.28m loss in FY09.
The UK arm of Avnet EMG - the distributor's components arm - operates as an agent under a commissionaire's agreement with Belgium-registered Avnet Europe Comm VA.
UK revenue throughput for FY10 increased 79.6 per cent annually to £120.9m. This figure was given a big boost by the January 2010 integration of components player Abacus, which Avnet acquired in 2008. Standalone net revenue for Avent EMG UK in FY10 grew 84.4 per cent to just over £14m, with operating profits of £1.2m.
Combined UK sales across Avnet's two divisions stood at almost £363m. This figure is sure to be given a big boost in FY11 by last year's blockbusting $600m (£368m) acquisition of Bell Micro, which closed a few days into Avnet's current fiscal year.
Both sides of the distritbutor's business painted an upbeat picture of economic recovery in their annual directors' reports.
The EMG report said: "General market conditions improved dramatically in the second half of the financial period."
The Avnet TS report added: "Business started to see some recovery in sales following the difficulties experienced in the prior year when, due to the recession, there was a need to restructure and cut costs. In [FY10] the company managed to maintain a consistent margin given the very competitive market conditions."
Average monthly employee numbers at Avnet TS during the year were 133, compared with 181 last year. Admin employees fell from 43 to 24, while sales numbers dropped from 138 to 109.