- Northamber plc has announced preliminary Results for the year ended 30 June 2011 showning £7.4 million (5.8%) reduction in full year sales to £121.1 million (2010 £128.5 million).

This further confirms the very widely reported decline both in volume product sales in this sector since last January and with that the extreme price erosion driven by the resultant supply/demand excesses.

The pre-tax profit reported at the interim was reversed into what is the company's first reported full year pre-tax loss for 18 years of (£106,000) compared with last year's £258,000 pre-tax profit.

D. M. Phillips, Chairman commented: "The Interim Statement shared our concern with the potential impact of the downturn on the UK economy and its effects on our industry in particular. Unhappily those concerns have been realised.

Others in our overall sector have already reported year-on-year falls in computer hardware sales of between 17% to 23%. Our own sales activities in our fourth and final quarter could not withstand the downward pressures and were some 10% lower than the previous quarter, during which we had achieved a small like-for-like increase in turnover."

We have consistently maintained our declared commercial stance that we shall avoid "Empty Revenue" despite the price erosion which has been endemic in the sector. With the exception of some selected overhead dilutive actions, we have been able to maintain our gross margins and for the year they increased by 0.15 percent from 6.69% to 6.84%.

"On reduced sales, the resulting Gross Profit was £8.3 million compared with the £8.6 million in the previous year. A reduction of some £300,000.

"Our evolving business model is always under either review or levels of re-invention and has served us well and largely continues to do so. However with the very high levels of uncertainty which now pervades the whole economy both nationally and internationally, your Board considers it prudent to carry out a thorough and ongoing strategic review of the business.

"Our balance sheet remains strong and liquid. The fixed assets are represented by quality freehold property to the extent of 94% and current assets of £22.1 million are liquid with a stock turnover of 9.9 times (compared with 11.6 times last year), debtor days at 38 days (2010: 35 days) and creditor days at 40 days (2010: 41 days).

At 8:13am: [LON:NAR] Northamber share price was -5p at 48.5p

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