Acquisition boosts VIP Computer Centre
COMPUTER parts distributor VIP Computer Centres saw revenues rise 13% to £180.1m after it bought Liverpool’s CMS Computers for £1.7m.
The Warrington-based company, which was founded by India-born entrepreneur Jatti Sahni, also continued to grow internationally in the year to the end of June, with sales into Europe through its Netherlands-based subsidiary rising more than 10%.
Operating profits rose from £1.3m to £2m, and bottom-line profits rose 30% from £1.3m to £1.7m.
Accounts reveal that VIP paid £1.1m in cash for loss-making CMS, with deferred consideration of £596,000. The acquisition added £13m to group sales in the eight months after the acquisition in November 2011.
Underlying group sales were 5.4% ahead.
In his business review Mr Sahni said demand had been suppressed by the global economic climate, which also impacted prices and affected customer credit lines.
Commenting on the CMS deal, he said: “The directors believe the system-building skills of CMS compliments the existing group businesses and will bring opportunities in the IT sector to the group.”
He said CMS’ pre-tax loss of £59,000 since the acquisition was “in line with expectations”. Exceptional costs of £410,000 resulted from restructuring the business and relocating its operations from Liverpool to VIP’s base in Woolston.
Last month VIP said it would be rebranding its wholly-owned subsidiary Realtime Distribution – which it acquired in 2006 – as VIP Computers.
Realtime’s operations will be merged with the parent company to create a wider product offering for customers and a broader customer base for vendors.
As a result of the integration Mark Reed, managing director of Realtime will leave his role early in the new year.
Mr Sahni said the group is investing £1.6m by taking a further 31,000sq ft of new warehousing in Warrington.
