Novatech boosts profit as it turns focus to B2B

Portsmouth-based reseller closes trio of retail stores as annual accounts reveal increased profit on flat sales

Reseller Novatech enjoyed a bottom-line boost in its 2013 fiscal year thanks to reduced admin expenses and a greater focus on its B2B unit.

The Portsmouth-based outfit sells PCs and components, as well as software and peripherals, online to consumers and also to businesses. Its directors' report for the year to 30 April 2013 claims that it has increased its focus on the commercial sector to help protect sales and profitability.

"The company has seen turnover fall to £38.7m [in FY13], from £39.2m in the prior year," explains the report. "This is as a result of our continuing move of focus away from the increasingly difficult consumer sector to concentrate on the business sector, where the board feels our future lies and where we are enjoying continued growth."

The company's website reveals that it has recently closed its retail stores in Reading, Cardiff and Portishead as "the way people buy technology has changed". All staff are now based at the company's headquarters and showroom in Portsmouth.

During FY13 Novatech saw its pre-tax profit grow by about two thirds year on year to £852,687. The increase in profitability can largely be chalked up to an administrative expenses bill that reduced by almost £500,000 on the prior year to about £6m. During the year total shareholders' funds reduced from about £4.6m to £4.4m. Average monthly staff numbers fell slightly from 216 to 204, and the company's wage bill reduced from £5m in FY12 to £4.8m this time out.

The directors' report concludes: "We will continue to make further investment going forward where we see the greatest opportunities. The directors see the company's key strengths as having a focused strategy, an effective management team and a skilled, loyal staff to deliver it. The directors look forward to a year of growth in 2013/14."