Horizon weathers decline in turnover to report a 20% rise in profits

COMPUTER distributor Horizon Technology Group has reported a 20% rise in pre-tax profits to €4 million. The company said increase in interim profits came despite a 1.2% decline in turnover to €148.9m.

"These results reflect excellent progress for the group. Good customer satisfaction resulting in market share gains in the UK and Ireland, a high level of control of costs and the addition of new vendor partnerships have enabled Horizon to continue growth in profitability for the seventh consecutive half-year period," chief executive Gary Coburn said.

He added that the first six months of the year saw continuation of the recovery in the IT market.

Horizon said demand for software and consulting services improved in the first half of 2005.

"PC unit price depreciation has continued to be a significant trend in the market, albeit at a lower rate than that experienced for the last two years, in part due to the strengthening of the dollar in the first six months of 2005."

The company said that it continued to focus on cost control and efficiency gains during the six months, limiting growth in operating costs to 3.3% year on year, even though staff numbers grew at twice that rate.

Horizon said its cash flow and financial position remains strong. Net debt at the end of June was €6.7m compared with €8.1m at that time last year.

"Despite the recent difficulties of some of its UK peers, our view is that the Horizon share price has attractive further upside potential on a 12 month investment horizon," Dolmen Securities analyst Stuart Draper said yesterday.