LONDON Sales at ACAL in the financial year to the end of March fell to £269m from £272m. Excluding a disposal last year and the acquisition of CPI this year, the fall in sales was just over 1% in sterling terms.
This produced operating profit before goodwill and associated companies of £14.2m compared to £16.7m, a reduction of 15%. The shortfall was in Continental Europe as profit was maintained in the UK on a like-for-like basis.
John Curry, ACAL’s chairman said, “Though we generally controlled overheads, we were probably not aggressive enough in cutting costs when our expectation of demand was not achieved in some of our Continental European companies. However, we continue to show improvements in gross margin by focussing on our added value business and because of the sale of a lower margin business and purchase of a higher margin business; gross margin this year has improved from 24.8% to 25.9%.”
While the sales and profits fell the company is raising its dividend to 21p, an increase of 4.5% on last year.
Curry added, “The outlook is starting to look less difficult, with order growth in the component business and signs that economic activity has picked up in the U.S. and Asia and that this is spreading to Western Europe.”
“We feel that after a long period of reducing sales we should see some progress in the second half of this year because year-on-year order decline ceased six months ago and there are signs of year-on-year order growth – though at times rather patchy.”
Sales in the electronic component distribution business were down while there was growth in the industrial controls, IT products and IT parts services divisions.