Northamber laments sluggish first quarter

Fall in vendor rebates hits distributor's profits

Distributor Northamber has stressed it remains in a strong financial position despite suffering another quarter of losses and falling revenue.

In an interim management statement, Northamber admitted its fiscal 2013 had got off to a sluggish start as it bemoaned the Olympics and consumer electronics slowdown that recently sucked under retail goliath Comet.

Revenue for the three months to 30 September was down "marginally" on the previous year, hitting the volume rebates Northamber receives from vendors. This meant overall margins were down by almost one percentage point compared with fiscal 2012 as a whole.

The London-listed firm said it had not yet seen the full benefit of its recent drive to cut overheads, but added that losses for the quarter were about half that of last year's Q1.

Some vendor partners have tightened their credit terms, while reseller customers are taking longer to pay up, the distributor added.

"We can but maintain efforts to concentrate on delivering profitable revenue, alongside our well-repeated mantra of controlling costs while taking whatever opportunities that emerge," Northamber stated.

Looking on the bright side, Northamber stressed its balance sheet remains healthy. Its current assets ratio stands at nearly three.

The distributor also claimed it is well placed to benefit from the need among suppliers to cut their distribution costs in response to the market backdrop.

"As a company with proven expertise in the logistics of distribution and the resources able to handle a significant increase in the type of products distributed, we should be in a good position to benefit from any future consolidation in the industry," Northamber said.