Companies: ACL   

Technology distributor Acal continues to struggle in a tough market, though latest results for the year to March did at least contain a few positives for investors. Overall, the company saw sales slip a further 3% to £260.7m during the period, which in turn drove profits down £700,000 to £8.3m. Across the group as a whole, however, margins actually edged up slightly (a rare occurrence in the hardware distribution sector). Moreover, management upped the full year dividend by 3%, affording Acal’s shares an attractive 6.6% yield at current levels. Technology resellers continue to face increasing competition and pricing pressures but Tony Laughton, Acal’s chief executive, believes his company is better positioned to buck the trend than most. First and foremost this is because the business aspires to add value to the distribution process – through specialist knowledge and services – and therefore sees itself as being more than just a box shifter. Almost as importantly, Acal has a more pan-European focus than many of its peers and this, says Laughton, acts in its favour when dealing with large multinational customers. With analysts forecasting only a modest improvement in profits this year, Acal is far from an exciting growth story. Nonetheless, the shares may continue to appeal to those with an eye on dividend income. Hold.