Distributor bemoans weak conditions following sale of IT Solutions unit to Avnet

Distributor Acal has lamented “weak market conditions” in its latest financial results, after seeing fiscal first-half turnover drop 2 per cent on an annual comparison.

The pan-European firm, which recently sold its IT Solutions unit to Avnet, saw turnover from ongoing operations hit £77.6m in the six months ended 30 September. Revenues from its Electronics division fell 1 per cent to £53.7m while its Parts Services arm saw turnover drop 4 per cent to £23.9m.

Higher gross margins and tighter cost control ensured Acal's pre-tax profits came in slightly ahead of last year at £2.6m.

Richard Moon, chairman of Acal, said: “Industry statistics from the UK and continental Europe indicate that the market for electronic components has weakened during the first half of the current financial year, particularly in the lower technology passive and electromechanical arena.

“Our Electronics division has not been immune from these market conditions. However, the growing success of our strategy of focusing on higher technology semiconductor, power, RF and wireless components continues to be of benefit in mitigating the effects of the market conditions.”

Moon added that he expected the weak conditions within both divisions to continue to at least the year end.

“Consequently, at present we do not expect any year-on-year growth in the business in the second half year,” he added.