Recovery play APC, the specialist distributor of electronic components, has announced sparkling improvements in sales and profits for the half to February. Chief executive Mark Robinson (whose family speaks for 35% of the shares) unveiled a significant leap in profits from £47,000 to £251,000 before goodwill, on sales lifted by 65% to £4.3m, marking a continuation of the group’s recent good form.

Even after goodwill and a £25,000 exceptional relating to the buy-back of the equivalent of 25% of the company from Third Advance Value Realisation, profits at the pre-tax line were £208,000. ‘We’ve maintained our momentum,’ commented Robinson, explaining that the numbers reflected the benefits of the May 2006 acquisition of Hero Electronics, as well as organic growth emanating from value adding ‘design-in’ sales from a ‘technically capable’ sales team.

APC has boosted its product range by signing deals with manufacturers such as VPT, a provider of power distribution products for aerospace and the military, and, following the Hero acquisition (adding between 500 to 600 customer accounts), has a much bigger array of customers to sell products to. ‘Our gross margins are very high, compared with the volume “box-shifting” end of the market,’ added Robinson, ‘and we now consider ourselves one of the top two or three specialist distributors in the UK.’

Following the buy-back, APC is better placed to make earnings enhancing acquisitions without overly diluting shareholders and, for the year, house broker Seymour Pierce is looking for a three-fold rise in pre-tax profits (before goodwill) to £600,000, on sales expected to grow from £6.5m to £9m – earnings are set to burgeon to 2.7p (0.9p). Though small with a chequered history, APC is in growth mode and commands attention. Speculative buy.