Public sector rollbacks put a dent in XMA's top line

Nottingham reseller's 2011 numbers show sharp sales decline but profitability was up

XMA had to endure a double-digit sales slump in 2011 as big-ticket government deals came to an end, but the reseller managed to keep profits steady and maintains it is well placed for the future.

The Nottingham-based firm filed its yearly numbers with Companies House this week, revealing that revenue for the 12 months to 31 December 2011 fell more than 17 per cent annually to £116m. But operating profit fell 7.6 per cent to just under £3.1m. This equates to a rise in operational margins from 2.36 to 2.64 per cent.

The sales drop is primarily attributed to lucrative government programmes – the Home Access scheme chief among them – which took place wholly inside 2010. The directors' report for the year points to an unyielding economic climate, but sounds a note of optimism for the coming years.

"As extensively reported, the IT industry was extremely challenging throughout 2011," said the report. "A like-for-like comparison, removing those discontinued [public sector] activities, would show growth in the underlying business."

The directors add that a nigh-on one point improvement in gross margin percentage showed the firm's "strength and adaptability" in 2011.

"The directors are convinced that XMA's position is now firmly established in this marketplace [and] remain confident that XMA's presence across the breadth of the public sector and growing engagement in the corporate sector across a variety of technologies and related services will ensure success over the medium to longer term," added the report.

"Through further investment in our people and systems, we strive to expand our business in related markets. The directors remain confident that XMA is well placed to take advantage of opportunities as they arise."

During 2011 the reseller's net assets grew from £10.6m to almost £11.3m. Average monthly staff numbers fell slightly, from 267 to 256.