As their shares bounce along the bottom, after falling 30.77% year to day Sydney based distributor AmberTech has reported a 29.4% fall in profits during the past financial year, as the business struggles to manage cost blowouts.
Despite revenue climbing to $95.5 million the business saw distribution costs rise 14%, travel costs 33% and employment costs increase 13%.
The business that saw an increase in retail sales from $11.4M to $12.9M after acquiring several new brands following the acquisition of Convoy has also reported a 17% increase in marketing costs.
In that period the business lost distribution of AudioQuest cables to Sydney based Advanced Audio.
Back in May 2024 their shares were trading at $0.32, earlier today they had fallen to $0.18.
The business that splits their revenues into three categories spanning Integrated Solutions, Professional and Retail saw sales rise in their Integrated Solutions business from $43.6M in 2023, to $47.6M in 2024, Professional Services rose from $29.3M to $35.2M.
Management claims that ‘Notable delays and cancellations in the broadcast media sector adversely affected their financial results.
One of their clients is Network 10 whose owners Paramount Global is struggling financially with questions raised about the future of the Ten Network in Australia with all major investments at the network put on hold.
On a positive note, Ambertech cashflow cash flows improved whilst working capital fell by $749,000 to $18.4M.
Management claimed that aligning the timing of costs associated with delivering growth with the subsequent increase in revenues has
presented challenges. While these investments are intended to drive long-term growth, the immediate impact on profitability was affected by delays.
Whilst remaining optimistic about further growth opportunities the Company is struggling to deliver growth for products such as Bluesound with Asian brand Wiim stripping market share in the amp market, because it is perceived as being high quality and half the price of the BlueSound offering.
The business claims that Acquisitions continue to be a key component of our growth agenda and careful consideration will be given to
optimise the structure of any future business combinations”.
The business has not said how old the stock was that they acquired from Convoy which included brands such as JBL Premium products and several Lenbrook products.
Peter Amos, Managing Director, commented: “Our focus on supporting and growing our dealer network and strengthening our brands has proven effective, driving notable revenue growth. While profitability has faced pressures due to timing and external factors, we remain confident in our strategy and the opportunities ahead
Robert Glasson, Chief Operating Officer, added: “The increase in costs associated with our growth strategy was necessary to support our expansion and market presence. Although we have faced challenges with delayed projects and economic conditions, our early results for the new financial year are promising”.
