The distributor revealed that not only was its half year sales down for the six months ended 31 December, to £53.8m from £67.7m a year earlier, but that its long standing managing director is retiring.
Henry Matthews ends a thirty year stint at the channel player retiring, with John Henry joining as operations director.
Although the distributor has been keeping a tight control on costs it was hurt by inflation hikes that forced some of its costs upwards.
"Distribution expenses are a very significant cost and were and still are heavily impacted by inflation. They are 4% higher than in the previous year, whilst the carriage cost component is 14% higher, reflecting the increases in fuel and other charges," the firm stated.
The distributor reported a loss of £487,000 for the first half year compared with an operating profit of £75,000 for the same period last year.
In his chairman's statement David Phillips said that the future continued to look difficult in the short-term.
"Against the remarkable falls in the prices of both I.T. equipment and consumer electronics, little has changed over the past few years. Confidence in and expectation of any considerable improvement in the whole economic background has, if anything, declined," he stated.
"The obvious impact has been pressure on product prices and margins versus increasing costs. There is little justification for optimism in the short term and all that be stated is, as always, we are conscious of all these factors and their impact on our business," he added.