Australian distributor WhiteGold Solutions more than doubled its net profit in the year before French outfit Exclusive Networks bought 70 percent of the company last August.
WhiteGold reported $1.85 million of net profit for the year ending 30 June 2014, up 153 percent from the previous year's $728,748, according to its report to corporate regulator ASIC published on 27 February 2015.
The profit came on the back of $39.6 million revenue – itself a $12.2 million improvement from the previous year.
WhiteGold bills itself as a value-added distributor. Its ratio of net profit to revenue of 4.5 percent compares very favourably to volume distributors in an industry of razor-thin margins. For the same financial year, Dicker Data scored 0.8 percent and Avnet Australia managed 0.6 percent (see box below).
Closer to WhiteGold's margin was another value-added distributor, Distribution Central, which achieved 2.2 percent in its 2014 financial year.
Net profit as percentage of revenue (2013-14)
| Distie | Revenue | Net profit | Net profit as percentage of revenue |
| WhiteGold | $39.6m | $1.8m | 4.5% |
| Distribution Central | $275.8m | $5.96m | 2.2% |
| Dicker Data | $662.76m | $5.2m | 0.8% |
| Avnet Australia | $445.3m | $2.99m | 0.6% |
| Synnex Australia* | $1.6b | $3.8m | 0.2% |
| Ingram Micro Australia* | $1.4b | $31.2 loss | 2.2% loss |
* - year to end of Dec 2013
Multinational Synnex ran its Australian arm on an even lower margin, making a net profit of just 0.2 percent of its revenue for the 2013 calendar year, in the latest available figures. Ingram Micro Australia made a loss of 2.3 percent of its 2013 revenue.
WhiteGold managing director Dominic Whitehand told CRN that the strong earnings performance was indeed one of the reasons for the Exclusive Networks acquisition.
"[Exclusive looked at] the organisation of the business, including the quality of our systems, the quality of our people and our customer base, a similar vendor portfolio. And of course, our strong EBIT-to-revenue percentage."
The integration with the Paris-headquartered giant is expected to complete by the end of this quarter, Whitehand said, and that gaining the expertise of a large parent company is a plus.
"[Exclusive Networks chief executive] Olivier Breittmayer has been very supportive and always makes himself available to us when required – as does Barrie Desmond our COO, Tony Rowan our CTO and the rest of the executive team.
"What's even stronger is the fact that there is a group of 20 country managers in EMEA that is only a phone call or email away when any of the local team want advice, guidance, a sounding board for business ideas or just to share information."
Next: Disties' revenue per employee
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