Tinglobal to build services play after robust FY11

Second-user firm ponders acquisition of third-party services player after growing profitability

Second-user specialist distributor Tinglobal will look to invest in building out its services proposition this year after increasing sales and profitability during an upbeat 2011 fiscal year.

For the 12 months to the end of May, revenue at the Cirencester-based firm was up two per cent annually to £23.6m. Operating profit stood at £1.65m, up 23 per cent on last year. This equates to a rise in operating margins from 5.8 to seven per cent. Sales staff numbers grew 20 per cent to 35 - more than 40 per cent of total employees.

Chairman David Gutteridge claimed his firm's "operational leverage" had allowed it to drive up profitability last year.

"We invested very heavily in the early days in our systems and the high standards we apply," he explained. "Once you have covered your basics, the profit story gets more interesting."

Two months ago NVM Private Equity invested £6m in Tinglobal and, shortly afterwards, former Canon UK boss Andy Vickers joined up as business development director. Gutteridge claimed FY12 will be a year of investment and positioning for future growth.

Earlier this year the Tinglobal boss indicated he intends to get back in the acquisition game. He told ChannelWeb a third-party services player might make an ideal target.

"We would be looking at someone maybe in the network arena, as we have a lot of expertise in networking," he added. "We carry a lot of Cisco products and are well equipped and resourced. This year we are looking to invest quite heavily in our services play that Andy is going to build out."

One per cent of Tinglobal's FY11 revenue was generated in China, with Holland and India chipping in three per cent apiece. Denmark provided four per cent, France and Germany five per cent each and the US 18 per cent.

"Previously we have sold into France, Germany, Italy and Spain, providing they were willing to speak our language," said Gutteridge. "Now we have employed bilingual sales staff and that is really starting to work for us."