Fayrewood, the AIM-listed computer hardware and software distributor, is confident on growth, it revealed yesterday.
The company, whose head office is at Birmingham International Park at Solihull, reported higher profits and sales for the first half from its core niche distribution division and said it expects the current trend of turnover growth to continue.
In the six months to June 30, pretax profits before goodwill from the distribution arm totalled £3.8 million, a rise of 7.2 per cent compared with last year, on sales up 13 per cent at £182 million.
In June, Fayrewood sold around 1.17 million shares in German group Computer-Links for £ 11.1 million, reducing its holding to 27.75 per cent from 50.1 per cent. The sale generated an exceptional gain of £6.6 million.
As a result, Computer-Links' results have been consolidated in Fayrewood's accounts for five months only.
Group turnover including the change in accounting status of ComputerLinks rose by
4.2 per cent in the first half to £238.4 million. Group profits before tax, goodwill and gains on the sale of the Computer-Links shares amounted to £6.2 million, down from £7 million. Pretax profits including goodwill and the ComputerLinks sale gain came in at £12.2 million.
Looking ahead, Fayrewood chairman David Kleeman said trading in the quieter months of July and August followed the same patterns seen in the period to the end of June.
"As we increase the focus on the group's core business of niche distribution, we expect the trend of turnover growth, mitigating the competitive market conditions, to continue for the remainder of the year through our traditionally more active trading period," he added.
The group said it plans to expand the niche distribution division to new territories and also said it would maintain "a keen interest" in the development of ComputerLinks.
Mr Kleeman noted: " Fayrewood's remaining holding in ComputerLinks will continue to be a rewarding investment although we believe that the return on capital from our core niche operations will be higher."
It said it would pay an interim dividend of 0.4 pence, a rise of 33.3 per cent on last year. Turnover has grown from £3 million on its entry to the Stock Market in 1996 to £507 million in 2004.