LONDON Component distributor, the Abacus Group, has managed to increase both operating profit and gross margin as its sales have declined in the six months ended March 31. Operating profit increased to £4.2million up from £4.0million in te same perdiod last year and gross margin increased to 24.2% (22.5% in 2004). Sales declined 5% to £87.1milion (2004: £91.4m) but group profit before tax and goodwill was static at £4.0million.
The company has maintained its UK market share and a major bright spot is that the Trident part of the business is performing strongly and that there is good growth potential from its proprietary systems.
While gross margin improved in all regions and in the UK our core distribution business maintained its market share both the Nordic region and Italy slightly underperformed and according to cheif executive, Martin Kent, effort will be put in to building market share in each of these territories.
Trident, the systems, printers and displays business, has made good progress in successfully winning new contracts. Its bookings are up 43% by comparison with a year ago and, says Kent, these orders are starting to translate into sales.
The company had capital expenditure of £1.3 million in the period mainly related to work on the key IT upgrade project, which is now half complete, and represents a cumulative investment to date of £4.7 million.
Kent believes there will be a continuing sluggish market for the core distribution business and is not anticipating any improvement in industry conditions in this calendar year.
Both CTL and CCS, the group's cable assembly businesses, are performing well.