Harris Technology has revealed it closed its South Australian warehouse in Findon Adelaide and consolidated operations for the state with its Victorian operations as the company’s revenue faced declines.
The reseller posted revenue of $22.8 million for the half-year ending 31 December 2017, down 11 percent from the same period last year. It also posted a loss of $1 million for the period, which was a 63 percent year-over-year improvement.
“[Harris Technology Group] failed to meet revenue expectations and also experienced a slight reduction in margin. We are disappointed with our results,” Harris Technology managing director Garrison Huang said in an announcement in January.
“On reflection, the looming arrival of Amazon in Australia had an impact on customer behaviour and sentiment”
The company said in a statement that sales revenues were impacted by “challenging retail conditions” and “a general slowdown” in IT spending.
There was also an increase in customer rebates, particularly with a one-off rebate payment of $213,000 made to a major customer, which Harris said adversely impacted margins.
In addition to its changes with the South Australian business, Harris also cut staff numbers through redundancies, which incurred a one-off $65,000 payroll expense.
The company’s results reflected a decline in its expenses, with notable reductions in distribution, marketing, transaction, technology, depreciation and amortisation expenses, which were countered by increases in occupancy costs, finance costs, exchange losses and other expenses.
The financing costs, in particular, were highlighted, citing ongoing loan interest repayments. The costs came in at $188,348 for the period, up from $102,146 from the half-year ending 31 December 2016.
Due to the lower than expected results, Harris’ board says it was unlikely that the company will achieve positive earnings for the full year, although it expects to see a positive trading outlook in the second half.
“Due to the seasonality of [Harris Technology Group’s] business, results are traditionally stronger during the second half,” the company said.
“An uplift in sales and orders performance has been observed in January and February 2018, and the board expects that this positive trend will continue during the remainder of the financial year.”