Northamber losses down to investment in long-term growth, distie claims
Surrey based Lenovo partner lost £116,000 over a six-month period despite revenue rising
Northamber lost £116,000 for the six months ending 31 December 2021 despite sales jumping by almost nine per cent during the period, as the distributor claims that it is investing in long-term growth.
The Surrey-based distie, which also counts Microsoft and Fujitsu among its vendor partners, said an increase in distribution and administration costs in an effort to drive long-term growth had caused the losses.
That's despite revenue for the six months jumping 8.8 per cent year-on-year from £29.7m to £32.3m in what Northamber claimed were "challenging and very dynamic market conditions".
"Previously discussed lockdown challenges eased but still impacted some performance in some of our strategic business units and our subsidiary AVM, as Covid easing still impacted some site access for higher end projects and the rental market, but we are hopeful of improved performance as these restrictions continue to ease," chairman Colin Thompson said in a statement.
"Distribution costs increased significantly however as we continued to invest in developing the team for our significant growth ambitions; we were also affected by significant increases year-on-year on carriage costs, our biggest non-payroll cost."
The firm said that uncertainty caused by chip shortages and Brexit meant stock levels stood at £11.2 million compared with £8.4 million at 31 December 2020.
It added that while lockdown challenges eased, Covid still impacted the performance of some of its strategic business units and subsidiary AVM.
Lenovo announced last June that Northamber had been appointed as its third UK and Ireland distributor for its Infrastructure Solutions Group alongside Tech Data and Arrow as it targeted growth in the SMB and mid-market space.
And Thompson said he was "cautiously optimistic" that the company would soon turn a profit again given the investments made in recent months.
"In keeping with prior outlooks that we shared, we remain cautiously optimistic that the investments we have made in supporting our partners will allow us to continue to drive growth of strategic business units as some of these investments returns have been hampered by the impact of COVID and supply chain issues," Thompson added.
"We necessarily remain cautious due to the economic uncertainty, Brexit, the potential further impact of COVID and supply chain pressures but feel strongly that our continued focus on strategic higher margin value categories provides a solid road map for the future with profitable growth opportunities and the ability to unlock long term value for shareholders."