Expansys has reported an increase in sales and profit, although its UK business posted an annual loss of £2.1m.
The business, which includes distributor Data Select Network Solutions, revealed sales were up by a third to £108.5m for the year ending 30 April, and up 24% on a like for like basis. Reported profit before tax was £1.9m, a turnaround on its 2011 financial year, when it posted a loss of £700,000.
However, the listed company said its UK arm suffered 'significantly' last year, due to economic challenges and the consolidation of the UK business into its Marlow headquarters.
Expansys' UK sales were £18m, down 15.7% on 2011. It posted a loss of £2.1m, a widening of its £1.3m 2011 shortfall. It added: 'Trading since Christmas has been more encouraging and we expect a much improved performance in the UK business in the next financial year. We will continue to concentrate resources and investment into regions we believe offer a more attractive landscape and return in the short term such as the US and Asia.'
Data Select Network Solutions fared better, although profits shrank on its previous financial year. Sales were up 77.7% to £23.1m but profits decreased 8.8% to £3.5m. The company said profitability had been hit by the evolution of the Sim-only market, with operators moving towards a revenue share model, where distributors are rewarded according to post-connection spend, rather than with an upfront payment. It said while these changes will hit short-term profitability, they will stabilise the channel in the longer term.
The distributor confirmed it was one of several companies that had received possible clawback claims following alleged misuse of Sims. It said it had taken legal advice and felt the claims were invalid.
Expansys CEO Anthony Catterson said: 'Through our mix of retail, distribution and multi-channel commerce skills, the group is now emerging as a unique provider of end-to-end services for network operators and manufacturers in the telecoms and consumer electronics markets globally. We believe these full service capabilities will continue to drive attractive revenue and earnings growth in the medium to long term. We are expecting significant growth in the US and Asia to continue, with improved retail profitability in the UK.'
Editor: Graeme Neill