Distributor Entatech returns to profitability
Distributor reports an operating profit of £339,049 but settlement of legacy legal issue costs £1.2m
Distributor Entatech has returned to profitability after coming through a difficult period that saw it draw a line under legal issues and close an office.
Entatech concluded a long-running legal saga in February this year when it cut all ties with former owner Changtel Solutions, which HMRC claims went into liquidation owning £42m, and reached a settlement with HMRC.
At the same time Dave Stevinson took full ownership of the distributor through Stevinson Capital Limited and set about restructuring the business which has seen it focus on four areas - PC components and gaming; systems and peripherals; software and solutions; and networking and connected home.
In July the firm also had to close its southern office after losing a contract with Fujitsu.
Entatech reported an operating profit of £339,049 for the 12 months ending 29 February 2016 compared to a loss of £1.5m in the previous year.
This came despite seeing a downturn in turnover from £117.6m a year ago to £103.2m in the same period.
The operating profit was however offset by the settlement agreed with HMRC which saw Entatech pay £1.2m, with a further £700k due at the year end, taking the overall loss for the year to £1.1m
In the strategic report filed on Companies House, Stevinson said that consolidation in distribution has left space for more specialist players to thrive.
"Entatech has been trading in an increasingly competitive market which has shown further consolidation allowing the big four major IT distributors to increase their share significantly," he said.
"This however means that there are pockets of businesses that remain untouched or overlooked by the larger players in which smaller, more agile distributors can operate successfully.
"Entatech UK aims to provide a credible alternative to the big four IT distributors in the domestic market. This is about focusing on the niche product areas where Entatech can add value."