Tanking PC Sales Holding Back Northamber Improvement

Channel News

Troubled distributor stays optimistic as revenues drop by 20 percent on last year

Loss making distie Northamber has stated that a turnaround in its fortunes “will not be immediate”.

In its latest trading update, the firm said revenue for the nine months to 31 March was down 20 percent on last year, with operating losses also increasing. This is despite the company’s attempt to reduce its cost base and move to higher margin products.

Slow motion

In a trading statement, the company revealed: “Steps are being taken to accelerate this movement, however, it will take some time for the impact to be fully realised.”

The firm blamed the strong decline in demand for PCs during the first quarter of this year, adding: “This trend and, more specifically, the accompanying price and margin erosion, show no signs of abating.

Northamber said IBM’s move to sell off its server business and Siemens’ decision to terminate its stake in the PC partnership with Fujitsu a few years earlier as evidence of the effect the trend is having on the market.

The company said it was mindful of costs and “significant cost savings have been, and are being, implemented and operating expenses have fallen by 14 percent for the nine months to 31 March, compared with the previous year.”

The distrinutor insisted that it was in a good position to trade its way out of its current problems.

“Whilst the update on our trading position is not comforting and a turnaround will not be immediate, the outlook is not all gloom. There are opportunities available which we shall endeavour to maximise over the shortest time feasible,” it said.

“The very considerable core strength of our totally tangible asset base, including annual formula depreciation, is such that we are not restricted in being able to effect change.”

Last month, Fujitsu cut its links with the distributor following a split with IBM in January and with Kingston Technology in February.

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