AIM-listed tech distie Northamber’s sales are again withering on the vine, with blame falling on Microsoft’s Windows 10 and pesky human beings who are failing to buy more computers.
Sequestered in an industrial estate in deepest Surrey, Northamber has made a living from selling IT for the past 35 years but might just have seen its best days – peaking at £299m in the early noughties.
Revenue for the six months ended 31 December slipped nine per cent to £32.52m, continuing the negative trend that showed up in the second half of the prior financial year, when the company blame a PC sales hiatus on the launch of Windows 10, complained commercial adoption of the software was “slow” and bemoaned a stock glut.
Chairman David Philips, who is seeking a managing director, said he had been hopeful at the end of fiscal ’15 it could “overcome those negative forces”.
“I did again sound a note of caution, one that proved well founded as the core difficulties within the sector’s dynamics continued to prevail over our ongoing corrective actions.”
Longer-term, Northamber is labouring to distance itself from empty calories revenues, moving into higher margin kit sales, but this is not an overnight process. It doesn’t help companies like Northamber that more enterprises are consuming more IT-as-a-service products.
Philips said it had taken steps to improve skills of staff, and beef up the sales forces, and this recruitment has increased overheads for the period by £190,000 compared to the same period a year earlier.
After admin and distie costs, the loss from operations was £574,000 versus an operating loss of £292,000 in the earlier year. The net loss for the period was £547,000 after a £27,000 gain from interest on £3.8m cash in the bank.
Philips, the desperate realist, was again desperately realistic when he said this six month stretch showed the “complexities” of the industry “where we aim to make credible judgements about the future whilst subject to volatile markets.”
“With the current marketplace uncertainties it is difficult to indicate a near term return to profit. We are confident in the medium and long term of delivering profitability due to already evidenced underlying growth, supported by our strong financial position and infrastructure,” the chairman stated. ®