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Overview
The
key features reported in the Chairman’s Statement dated 14 March 2006
reporting on trading in the year ended 31 December 2005, are as follows: |
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·
Sales increased in the Niche Division by 18.5%,
growing from £363.3 million in 2004 to £430.6 million in 2005. ·
We sold 1,169,000 shares in ComputerLinks AG, a significant
part of our shareholding for £11.1 million, before expenses, to produce a
gain on disposal of £5.2 million. ·
Adjusted profits before taxation, amounted to
£12.7 million. The ComputerLinks
group was accounted for as a subsidiary for the first five months of the year
and as an associate for the remainder of the year (2004 : £16.2 million
consolidating a full 12 months contribution from ComputerLinks as a
subsidiary). On an unadjusted basis,
pre-tax profits were £18.3 million (2004 : £15.1 million). ·
Adjusted earnings per share were 16.2 pence (2004
: 16.8 pence). Unadjusted earnings
per share were 26.6 pence (2004 : 15.5 pence). ·
The Directors propose a final dividend of 1.1
pence (2004 : 0.4 pence) to make a total for the year of 1.5 pence (2004 :
0.7 pence), an increase of 114%. ·
Adjusted post-tax return on capital on the basis
of shareholders’ funds at the year end was 15.3%. The Niche Division
Our
operational strategy within the Niche Division is to avoid competing with the
main brands sold by the major European distributors which stock the widest
range of computer peripheral equipment.
The Niche Division concentrates therefore on seeking and securing a
broadly balanced range of less globally known brands. We then seek long term relationships with
suppliers by building market share for their products. At the same time, we provide a
round-the-clock service to our customers.
In short, distributors typically grow the market by targeting small
and medium sized customers who would otherwise be more difficult for
manufacturers to reach. The key to
the Niche Division’s success has been delivery, quality, services, support
and reliability, and it is this that has produced the rapid increase in sales
for the Division as a whole over the last four years. That growth has been achieved with only an
additional £1.8 million of equity raised over the same period, which has
resulted in our working capital needs increasing substantially. |
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