Asbis Middle East enjoys surge in sales

Components distributor Asbis’ Middle East and Africa arm is closing in on the US$70m-a-year sales mark after a financial report submitted to London’s Alternative Investment Market earlier this month revealed the full extent of its growth during 2006.

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By  Andrew Seymour Published  April 12, 2007

Components distributor Asbis’ Middle East and Africa arm is closing in on the US$70m-a-year sales mark after a financial report submitted to London’s Alternative Investment Market earlier this month revealed the full extent of its growth during 2006. According to the report, Asbis made sales of US$68.6m in the Middle East and Africa last year — an increase of 25% on the US$55.8m it raked in the previous year. The double-digit rise means Asbis’ Middle East arm is expanding three times as fast as Asbis’ overall operation. Global sales rose 8% year-on-year in 2006 as the company edged past the US$1 billion figure for the first time. More than 80% of the Cyprus-based distributor’s turnover is still derived from the former Soviet Union and Eastern Europe, where it boasts a huge footprint. According to Asbis, the revenue growth was underpinned by its relationships with manufacturers such as Intel, AMD, Hitachi, Seagate and Samsung, plus the addition of new suppliers across key geographic markets. The company also confirmed that it had seen “encouraging” growth in the percentage of sales achieved from its own-brand flat panel and consumer electronics lines Prestigio and Canyon. It claims the margin impact of ongoing pricing pressure, especially in consumer equipment, was partially offset by a sharp 40% rise in unit sales to more than 16 million SKUs last year. In addition, the proportion of sales from its higher margin, own-brand products increased 20% year-on-year. “Looking ahead we are focused on enhancing the mix of products sold with a view to building margins against a tightly managed cost base,” said Siarhei Kostevitch, chief executive at Asbis. “While we anticipate that the markets in which we operate will remain competitive and subject to price pressure, we expect to be able to continue the growth in market share we achieved in the last financial year. Kostevitch added: “We also expect to maintain our market leading position based on the strength of our existing infrastructure, our delivery capabilities and our ability to rapidly introduce new products and services — including innovative online services — to our growing customer base.” In what marks its maiden full-year results since listing on the AIM in October 2006, Asbis also revealed that it banked a profit of US$16m last year. That represents a jump of 30% on the US$12m it earned during the course of 2005. The firm also hailed its “strong” cash position after finishing the year with total cash and equivalents of US$13m. “We are pleased to report another year of growth in sales and profits with a good performance from all our lines of business,” added Asbis chairman John Hirst. “In particular, it was pleasing to see very good progress in the Group's own brand ranges — Canyon and Prestigio — where margins are measurably higher than the traditional business. In addition, operational gearing has been strong as sales have built on the Group’s established and efficient infrastructure across its wide spread of geographic markets,” he concluded.

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