Probrand flees high-turnover, low-margin deals in tricky 2011

Accounts reveal Brummie reseller changed tack last year, but sales and operating margins still took a big hit

Probrand saw about 30 per cent of its top line fall away in 2011 as it claims to have focused on exiting low-margin business, the reseller's annual accounts reveal.

Documents filed at Companies House this month show the Birmingham VAR's turnover for the year to 31 December 2011 fell from £51.4m to £36.6m. The directors' report for the year explained that during 2011 "the company followed a policy of moving away from high-turnover, low-margin business". This strategy was the key to boosting gross margins from nine to 11 per cent, added the report.

But operating margins actually fell during the year, with operating profit plummeting 55.6 per cent to £356,547. This equates to a fall in margins from 1.6 to less than one per cent.

During the year net assets grew from £1.4m to £1.7m. The directors' report explained: "Continued investment in electronic systems helped reduce overheads and dividends were also heavily reduced."

Staff numbers rose during the year from 68 to 71, but Probrand still managed to marginally trim its wage bill to a little less than £2m.

Boardroom pay packets were scaled back in a big way, with overall directors' remuneration dropping from £299,240 in 2010 to £189,345 last year. The firm's highest-paid director saw their salary drop from £169,045 to £109,943.