Companies: ACL   

Acal, the technology distribution group with operations across Europe and the USA, disappointed investors with lower sales and profits for the half to September. Profits before tax and goodwill dipped 19% to £5.9m, with the bulk of the fall coming from the IT division, on a 9% sales fall to £127.1m. Net debt came in at £23.4m. Acal has navigated some tough market waters over the past two years, a scenario that continued over this half year, with continental Europe harsher than the UK. Furthermore, the industry recovery witnessed in the Far East and the USA has yet to filter through to Europe. Despite all this, the overall gross margin was raised from 23.6% to 26.4%, increasing in all divisions and partly compensating for the lower turnover. Moreover, the board believes recovery is on the way, with chairman John Curry arguing that 'we're just on the turn, and we had good orders in the last quarter'. As a show of faith, he lifted dividend from 6.7p to 7p. The shares have dropped back from a 620p year's peak, and could have upside. Analysts are going for profits of between £13.5m and £14m for the year. Speculative buy.