Amber Technology who is one of the few consumer technology distributors to list locally on the ASX has reported a 43.2% decline in profits despite a 2.5% increase in revenues. However this has not stopped some senior Amber executives getting pay rises.
During the 12 past months the Company has lost several senior executives including David Small who headed the Companies custom install operations. Profits fell to $1,806,000 at June 2009, Vs profits of $3,179,000 at June 2008. Total revenues for the financial year increased to $71,620,000.
A big problem for the Company is margins in their retail operations, with the Company struggling to make a profit from an increase in goods sold via mass retailers such as Harvey Norman.
The Company claims that their lifestyle entertainment division is still looking at ways to “improve market share and margins, in the face of tough competition”. During the past 12 months the Company has had to compete with brands like Denon who were taken on board by Harvey Norman mid 2008.
Denon is believed to have taken market share away from both the Onkyo brand distributed by Amber and from Yamaha. In the custom install division which last year lost long time executive David Small Amber has been hit by a downturn in demand for high end custom gear with several large jobs put on hold.
Managing Director for Amber, Peter Amos said “Our product offering, coupled with some new marketing initiatives has enabled us to improve our market share into a retail sector that was difficult throughout the majority of the financial year. This market share growth was offset by tighter margins due to both the impact of a falling exchange rate and competitive pressures to maintain market share”.
While Amber’s retail and custom divisions struggled to grow their professional and broadcast products division recorded excellent sales for the year said Amos.
“In Australia and New Zealand, the result for the year was impacted by a difficult period for products in our traditional broadcast and post production markets. Many of our customers were capital constrained as a result of the Global Financial Crisis” Amos said.
“In New Zealand we returned an excellent result as we continue to invest in growing the range of consumer product offerings to complement our strong track records of sales in the broadcast and post production markets”. He added.
Amos said “Our forecasts for the year ending 30 June 2010 are for continued growth in revenue and improvement in margins and profits. The current economic climate, changes in exchange rate as well as the capital nature of our professional segment and the uncertainty of timing of these major projects creates difficulty in accurately forecasting the results for any accounting period. However, Ambertech’s management believes the company is well positioned to achieve medium term growth targets of 5%-10% per annum”.
Among the executives to get pay rises was Brian Lee whose annual salary package rose from $262K in 2008 to $272K in 2009. Peter Amos had a salary package of $408K and R Gleeson a salary package of $205K Vs $186K in 2008.