Operator incentive squeeze hits Daisy Distribution profits

Operator incentive squeeze hits Daisy Distribution profits

Operators putting the squeeze on incentives for mid-term contract renewals has been blamed for a fall in sales and profit at Daisy Distribution.

Revenue for the 12 months to 31 March was £39.9m, down 23.1% on the previous year. Gross profit was £9.5m, down 15.9% on 2012.The company works with O2, Vodafone, Orange and T-Mobile but it said the lack of mid-contract incentives had a 'significant' impact on sales. In a statement, it said: 'The consequence of a lower level of renewals is that our dealers have earned less commission and hence the revenue shortfall was partly offset by an improved gross margin.' It added it was hoping to reinitiate these contract renewals this year.

Across Daisy Group, its losses widened by 28.2% to £16.8m. Sales were up by 0.8% to £351.5m. It blamed an increase in losses on amortisation of assets but said it was encouraged by adding another £10m to its free cash flow, with its pile now at £38.6m. It took over two companies during the past year, with another acquisition signed off after the end of its trading period.

CEO Matthew Riley [pictured] said: 'Notwithstanding ongoing macroeconomic headwinds, the group is cautiously optimistic about the year ahead. With a strong balance sheet and a solid base of recurring revenues from an improved product mix, we are well positioned in these more challenging economic times.'

Author: Graeme Neill

Written by Mobile Today
Mobile Today


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