Advanced Power returns to profit

10th May 2010 10:01

Advanced Power Components (APC), a supplier of specialist electronic components, moved into profit in the six months to 28 February as cost-cutting measures paid off.The company which makes a variety of niche components for sectors such as defence and aerospace, said pre-tax profits totalled £42,000 compared to a loss of £227,000 over the same period the previous year, even as revenues slipped to £6.47m from £6.77m.'We are pleased with the progress made during this six month period, which has seen the company return to profitability,' said chief executive Mark Robinson. 'Economic conditions have not yet fully recovered, however improved trading, coupled with the cost saving measures we have introduced and the exciting progress we are making in a number of areas, lead us to be guardedly optimistic about the future.'Robinson explained to ShareCast that, while sales in the electronic component sector have been picking up in the past three-to-four months, this may be due customers having to re-stock after cutting back during the economic downturn. He said that the strength of this apparent upturn will become clearer over the next couple of months.However, he pointed out that APC, which is more focussed on low volume niche markets, was less vulnerable to the vagaries of diminishing and replenishing stocks and did appear to be seeing signs of market stabilisation.While APC remains cautious about recovery prospects, Robinson points out that the cost-cutting phase is now behind the business.'We have commenced a training and hiring programme to increase the skills of our sales teams so that we are able to identify design programmes earlier and provide greater technical input to our customers' component selection,' he said in today's statement.Robinson pointed out to ShareCast that, having cut costs elsewhere by cutting staff, APC was now able to increase staffing overheads in other areas.APC had been planning for strong growth in 2009, but rapidly had to take action when it became clear this would not materialise. Robinson pointed out that the company was careful to cut costs in such as way that growth would not be jeopardised.'We didn't replace our sales and marketing director, but took people on in consultancy capacity, which helped us to ensure that we focused on the right areas, at 20% of the cost,' he said.He stressed that the company remained pro-active in many areas during the downturn and pointed out that APC had set up Minimise, a company of which it owns 19% that is marketing the 'imop' (inductive motor optimisation panel), which is used to reduce electricity.