LONDON The Abacus Group saw like for like sales in its financial period for the six months ending 31 March raise from £73.2million to £77.7million while ECC, the Italian distributor in which Abacus had a shareholding of 60% contributed an additional £13.7million.
Harry Westropp, Abacus’ chairman said, “It is pleasing to report that for the first time in three years trading conditions are improving in the UK for Abacus Group’s core distribution business”.
On a comparable basis, orders received were £82.1 million against £75.5 million for the first half and £68.0 million for the second half of last year: with ECC included, orders for the first half were £96.8 million, giving a book to bill ratio of 106%.
However increased overheads and a slight reduction in gross margin saw group profit before tax and goodwill falling to £4.0 million for the six months to 31 March 2004, in comparison to £4.2 million for the first half last year.
“All the sales growth in the first half came from the UK based businesses where sales were up 9% compared to the previous year, with a combined fall of 8% in Nordic and Italy as these regions lag the UK’s market recovery. However, it is encouraging to note that the combined sales performance of Nordic and Italy was up 8% on the second half of last year showing that these markets have also stabilised and are starting to grow again,” added Westropp.
The group’s UK and Nordic distribution businesses ended the half year with an order book 6% higher than at 31 March 2003, whilst the 90 day order book was up by 18%, and orders for delivery in the same month increased by 14% on the first half of last year.
According to Westropp, “These points demonstrate that despite an increase in orders, customer emphasis is still on the short term, making it reasonable to assume that growth is going straight into production, rather than creating an inventory build-up. “
Abacus has now acquired the remaining 80,360 shares in ECC Distribution (ECC), representing 40.18% of the share capital, at a price of £0.70 million in cash.
Abacus previously acquired 9% of ECC’s share capital in August 2003 and 50.82% in October 2003. The total share capital has been acquired in cash at an aggregate cost of £1.75 million.
ECC is the UK holding company of ECC Elettronica S.p.A. an Italian electronic component distributor, which is headquartered in Milan and covers Italy through a network of 7 additional regional offices.
Martin Kent, chief executive of Abacus Group, said, “Since the acquisition of the 60% shareholding, we have enhanced ECC’s franchise line card and believe that taking up the full 100% will improve the opportunity to continue with this development of their product offering.”