Northamber proposes drop down to AIM

Distributor says sub-market of London Stock Exchange is more suited to its size following years of sales declines

Distributor Northamber is planning to quit the London Stock Exchange's main market for the AIM in a bid to cut costs and red tape.

The Chessington-based firm is proposing to step down to the sub-market aimed at smaller firms at the beginning of September, and is seeking shareholder approval for the move on 31 July.

The AIM is designed to allow smaller companies to participate with greater regulatory flexibility than applies to the main market and Northamber argued it would provide a market and environment "more suited to its size".

Back in 2001, Northamber – which bills itself as the UK's longest-established trade-only IT distie – straddled the UK channel like a colossus with sales of £299m.

But sales have fallen every year since then barring 2005, languishing at £101m last year. Sales for the first three quarters of its current year, which ended on 30 June, were down 20 per cent and the distributor continues to bleed losses.

Northamber, which has lost a number of sizeable vendor contracts in recent months, most notably IBM, said moving to AIM would allow it to simplify the ongoing administrative and regulatory requirements of the company.

"The Board also believes that AIM will offer greater flexibility, particularly with regard to corporate transactions, and should therefore enable the company to agree and execute certain transactions more quickly and cost effectively compared to the Official List," it said.

"The Board believes this is likely to be a significant benefit to the Company going forward.

Providing it gets the nod from shareholders, Northamber expects the last day of dealings of its shares on the main market to be 30 August. Cancellation of the listing of its shares on the Official List will take effect on 2 September.