Computers Unlimited looks to trim portfolio after solid FY12

Distributor's annual report reveals plans for SKU rationalisation after robust growth in recently closed fiscal year

Distributor Computers Unlimited is looking to "rationalise [its] vendor base and SKU breadth" in the coming year after an up-and-down FY12.

In its annual report for the year to 30 April, the north London-based firm reveals that group revenue for FY12 rose 5.3 per cent year on year to £133m. Operating profit was up 9.7 per cent to £1.6m, equating to operating margins of 1.2 per cent. Sales in the UK were up 3.1 per cent to £87.3m, while continental revenue spiked almost 10 per cent to £45.7m.

The company is split into three divisions, with one focusing on Apple products and accessories, one on high-end audio and video systems, and the other on technology for companies in the creative industries.

The directors' report for the year outlines that all the top-line expansion came from successes in the Apple and audio and video segments. To support further growth, headcount was boosted from 169 to 198 during FY12, and sales and marketing ranks swelled from 169 to 198.

The report says: "In our traditional Creative Professional Division we have once more seen a year-on-year decline in revenue as the tough economic environment shows no signs of abating in this B2B space.

"We have resourced this area accordingly, but remain confident that we are a strong player in this market. We have seen fierce competition in the channel and, as a result, our gross margin percentage has fallen year on year."

Looking to FY13, Computers Unlimited intends to add vendors to its roster, and claims it is "well placed to to attract new and innovative suppliers into our fold". But to accommodate the new wares, excisions will have to be made elsewhere in the portfolio.

"As we take on new suppliers, we also take on additional work burdens and this manifests itself in increases in our cost base," says the report. "A key focus for us going forward is to rationaluise our existing vendor base and SKU breadth; the tail has got too long! We believe this rationalisation will help lower our costs and/or give us the capacity to take on more new vendors in the year ahead without increasing our costs."