The origins of P&P Plc lie with long-departed co-founders Pete and Pam, who back in the days of the Apple II made regular trips to the US to pick up the latest hot goodies for the microcomputer market and shipped them back to an eager UK market by jumbo jet. But times have changed so much that over the next 12 months, P&P intends to move out the distribution busines, the selling of low-margin, high-volume MS-DOS and peripheral products to mainstream dealers in the UK and Belgium because the business in no longer profitable. The Rossendale, Lancashire-based company will concentrate on selling higher margin mid-range products and services to blue-chip companies and specialist resellers, such as open systems and Unix dealer Power Systems, and Principal Distribution. Principal is the sole authorised UK distributor for Apple Computer Inc software and sells into the value-added reseller market. To cover working capital, future costs and the write-down of assets and goodwill, the group has made a UKP8.9m provision in its profit and loss account for the year ending November 30. But marketing manager Nick Melvin said that no jobs would be lost as a result of the decision – employees will be transferred into services or will work for the company’s specialist dealers. While the provision meant the P&P turned in net losses of UKP7.9m against profits of UKP365,000 last time, pre-tax profits actually rose 183% to UKP2m. Turnover was flat at UKP224.8m because margins continued to fall during the year, but the group reported that service revenues increased in line with targets – according to Melvin, income from services and large accounts rose 10% on last year. Some 51% of UK staff now work in service-related activities, he added, such as facilities management, training, systems integration and consultancy. The board is recommending a final dividend of 0.7 pence, which combined with the interim dividend of 0.7 pence makes a total 1.4 pence per share. P&P’s profit levels were also helped by a 10% reduction in operating costs to UKP37.6m. Headcount was cut by 45 to 805 earlier this year, and the company centralised its logistics activities; for example, to avoid duplication of tasks, it linked its warehouse, despatch site and configuration centre, which tailors products to meet the needs of corporate customers. P&P generates 83% of its turnover in the UK and the rest in continental Europe. Shares in the company rose 9 pence to 48 pence at the opening as the market expressed relief that it was still in profit.
