France is très bien for Hammer in stellar FY14

European expansion sees storage distributor enjoy big sales and profit growth

A huge boost in its mainland European business helped storage distributor Hammer post hefty top- and bottom-line growth during its 2014 fiscal year.

For the 12 months to 31 January Hammer plc saw its total revenue rise 15.5 per cent year on year to a little less than £125m, documents recently filed with Companies House reveal. Pre-tax profit soared by 52.3 per cent to almost £3.9m.

Sales in the UK rose 1.7 per cent to £71m, while revenue in the rest of Europe spiked more than 40 per cent to £49.3m. During the year the Hampshire-based firm set up offices in France and Germany, and the two countries were collectively responsible for more than half of the £14.2m increase in mainland European sales. Turnover beyond Europe stood at £4.7m, an increase of 42.9 per cent on the prior year.

"The directors are optimistic with regards to the general market conditions for the coming year," says the directors' report for the year. "The outlook for the economy in the UK is positive, and the company is well placed to benefit from general market growth. The geographical expansion within the EMEA region also positions the company well in order to benefit from further increasing trade within the eurozone over the coming year."

Over the course of the year shareholders' funds rose by £2.8m to £26.9m. No dividend was paid, and Hammer intends to continue retaining its profits as it invests in growth.

The report adds: "The cash position of the company strengthened in a similar fashion [to the shareholders' funds] during the year and it is evident that the business is successfully converting the profits that are generated into a cash holding that allows the company to actively pursue its targeted organic growth strategy."

Average monthly employee numbers during the year stood at 131 – exactly the same as the previous year. But the company's wage bill saw a big reduction in FY14, with total salaries dropping from £8.6m to less than £7.1m.