Hammer and EntaTech join £100m distie club

UK players reach nine-figure top lines in recently filed results, but margins differ wildly

Distributors Hammer and EntaTech sailed past the £100m turnover mark in their most recent fiscal years as both posted solid top-line growth.

For the 12 months to the end of January 2012, Hammer saw turnover grow 15.8 per cent to £105.2m, while operating profit more than doubled to £7m. This equates to a rise in operating margins from 3.75 per cent in FY11 to a meaty 6.7 per cent this time out.

The company's expansion was helped by some stellar growth figures in mainland Europe and further afield. Hammer's UK sales were up 14.9 per cent in FY12 to £72.6m, while European revenue rose 17.3 per cent to £28.1m. Turnover in the rest of the world was up 23 per cent to £4.6m. Employee numbers grew from 115 to 125 over the course of the year.

"The directors are pleased with the results for the year given the turbulent market conditions experienced in the latter parts of the period," says the directors' report for FY12. "The general market conditions for the coming year are considered to remain challenging, though, as the economy is finding it difficult to move out of recession and the European market conditions remain uncertain due to the continued eurozone troubles."

Telford-based EntaTech posted similarly impressive top-line expansion for its fiscal year that ended on 31 October 2011, with sales growing 13.5 per cent. Operating profit for the year grew 37.1 per cent to almost £680,000, but this still equates to margins of a skinny 0.6 per cent.

Founder Jason Tsai's director's report for the year cites the distributor's Microsoft OEM and Retail business as key growth drivers. A focus on vendors where Enta is the sole supplier has also proved fruitful, claimed the director.

"Once again, [this was] a challenging year's trading with the overall UK market sluggish, credit availability for clients challenging, and business confidence low," adds the report. "The director remains optimistic about the future and will continue to increase market share in Europe and [provide] higher-margin products through established specialised teams."

During FY11 EntaTech's growth was entirely fuelled by the UK, where sales rose from £60m to more than £77m. Revenue from the rest of the EU dropped from £39.2m to £35.4m. The distributor's average monthly employee numbers rose from 102 to 113 during the year.