Dec, 31st 2009 ACTION S.A. Group sold all its remaining holdings in Action Ukraina. The decision was taken as a consequence of the Action Ukraina unsatisfactory financial results generated in 2009 and a questionable outlook on Ukraine?s economic recovery. ACTION S.A. remains committed to its remaining portfolio companies.
The Board of ACTION S.A. decided to withdraw from Ukrainian market because of a negative assessment of the local market growth perspectives. Current date on declining GDP, rising inflation and unemployment do not indicate a fast potential for improvement.
We were monitoring the situation in the Ukraine very carefully. In spite of a profound restructuring process of Action Ukraine, the recent fall in Ukraine?s GDP and a series of its consequences had a negative influence on the financial results of Action Ukraina. As the disinvestment deal conditions were judged interesting, we took the decision to sell all holdings. - confirmed Mr. Piotr Bieliñski, President of the Board.
We are focusing on raising profitability margins all companies in the Group. One of our targets for 2010 is to show out full-year profits in all companies in ACTION S.A Group. The market environment in Ukraine, independent of the business model implemented, would not let Action Ukraine to achieve the financial results set. - added Mr. Bieliñski.
In financial year 2008/2009, Action Ukraina share in ACTION S.A. profits did not exceed 3%. Whereas Action Ukraina loss attributable to ACTION S.A. shares stood at 2 421 thousand PLN.
On 23 October, ACTION S.A. was distinguished by the CRN magazine as the Best Distributor of 2007 and the Company of the Decade.
The titles of recognition were awarded by readers of CRN Polska by means of an online survey organised to celebrate ten years of the CRN magazine. The awards are extremely important because they show the satisfaction of ACTION?s partners with their co-operation with the Company as well as confirm its the importance and position in the industry.
Capital Group ACTION S.A. generated a net profit of 33.8 million PLN net profit thus fulfilled the financial projections made in July this year, which set expectations for a sales income of 2,346 million PLN and 33.6 million PLN net profit. The results for the Quarter 4 indicate a stable growth of the value of ACTION.
The fourth quarter of 2007/2008 ended on 31 July 2008 was extremely successful for the Group. Quarter-to-quarter income on sales increased by 37.6% to reach 582 million PLN. The Group noted an increase in return on sales, which amounted to 8.06% in Q4, recording a growth of 0.5 PP in relation to the same period of the previous year. The operating profit rose by 37.2% to a value of 13.8 million PLN. The net profit amounted to 8.5 million PLN, i.e. 4.5% higher than in the previous year. The Group also recorded an increase in equity and return on assets by 3.7 and 0.5 PP respectively.
"We owe the excellent results of Quarter 4 to raising of the efficiency of sales, to continuously increasing the productivity of our logistics and warehouse base as well as to the execution of the orders under public tenders", explains Piotr Bielinski, President of the Management Board of ACTION S.A.
The results of ACTION S.A. in the fourth quarter were considerably boosted by the earnings on the execution of public tenders. The Company delivered 37 thousand computers and 3 thousand servers ordered by the Ministry of National Education and supplied 5 thousand computers to ZUS, the Polish social security establishment.
Contracts were signed for distribution of Sony VAIO notebooks and a range of consumer electronics and household appliances (Panasonic, Horn - distributor of the Denon and Alpine brands as well as Jura, a Swiss brand of coffee espresso machines). Those new distribution contracts are yet another step towards extending the service range.
In Quarter 4 of this accounting year the number of clients served by ACTION increased by 11%. Meanwhile, the number of products in the range of ACTION increased to 18,096 items. The Company also noted a 30 per cent increase in the number of invoice items in relation to the same quarter last year. Over 88% of the sales of ACTION was made online. Each month an average number of viewings of product description pages exceeds 4.5 million. The number of shipments made from the warehouse increased by 61.6% in the Q4 2007/2008 and the monthly average number of packages issued was 115,983.
ACTION continues to develop its operations in Ukraine. In June 2008 another shop was opened in the SHOK chain in Zaporizhia. In 2008 the company plans to open the next two shops in Vinnitsa and Donyetsk. The SHOK and KREZ retail chains owned by ACTION sell consumer electronics, household appliances and IT equipment.
In Quarter 4 of 2007/2008 SFERIS, a subsidiary of ACTION S.A., noted a 15 per cent increase in sales volume in its proprietary shops, signed lease contracts for another 5 locations and entered the B2B market. The re-branding of the chain was completed at 80%.
SSI SCHÄFER, world leader in the logistic solutions, is to deliver a modern warehouse system for ACTION S.A., which is to be commissioned by 31 August 2009 and is expected to increase the logistic productivity of the company as much as three fold. The contract with SSI SCHÄFER, with a value of 5.5 million EUR, is only a part of the investment. The full value of the warehouse development budget in Zamienie is 7.3 million EUR.
"We already use substantial warehouse facilities. We intend to build our competitive advantage by improving our logistics even further. The warehouse solutions applied will enable an increase in warehouse productivity by 200 % and strengthen the position of ACTION S.A. among the leading Polish IT distributors", comments Piotr Bielinski, President of the Management Board of ACTION S.A.
The close to 5,000 square metres of the recently completed warehouse platforms will soon accommodate flow-through shelving and transporter systems. The most modern part of the system is the automatic commissioning equipment, which, with support of a Pick By Light system, streamlines the order fulfilment process, facilitating collection of items by the warehouse staff.
"It is the most comprehensive warehouse logistics solution in the IT industry in Poland and one of the few such advanced in Europe. While maintaining the same level of employment, warehouse productivity will increase even up to three times, with the service of 15 thousand packages daily expected to rise to 45 thousand. It will also allow increasing our product range by virtually 70%. We believe that the costs of the investment will be returned within 3 years", adds Mr Bielinski.
The solutions applied will also enable comprehensive logistic services for B2B clients consisting of dispatch of goods direct to their customers. ACTION possesses a powerful warehouse facility at Zamienie, where its orders are processed and which is continually developed. After the investment has been completed, the warehouse area shall be increased 60 %.
The Management Board of ACTION S.A., one of the largest Polish IT hardware distributors, announced an increase in the forecast financial results for financial year 2007/2008 today.
Until now, the projections of the Group assumed it would generate a sales revenue of PLN 2,257.3 MM. That figure was increased by PLN 88.7 MM to a total projected amount of PLN 2,346 MM. The projected net profit was increased to PLN 33.6 MM, whereas the forecast announced in December projected a net profit of PLN 30.5 MM.
"The main reasons for enhancing our forecasts are the excellent results of the three most recent quarters of this financial year and the contracts which we acquired as a result of the public tenders we won in the first half of the year and which we are currently carrying out. The financial results of ACTION are a clear indication that we have taken the right path and that our development strategy has proven to be effective," explains Mr Piotr Bielinski, CEO of ACTION S.A.
After the first three quarters of this financial year, ACTION has achieved a sales revenue of PLN 1,761.3 MM and a net profit of PLN 25.3 MM.
