HP’s UK profits fall
July 19, 2018
The OEM’s British arm saw a rise in sales, but less positive news elsewhere.
Sales for the year until October 31st 2017 reached £1.4 billion ($1.81 billion/€2.01 billion), a year-on-year rise of 13.7 percent, reports The Register.
However, the cost of those sales, largely due to rising prices of components, increased by 17.8 percent. Administration expenses also rose, by 60.4 percent, meaning operating profit for the company stood at £12.67 million ($16.45 million/€14.18 million), a decrease from £29.36 million ($38.1 million/€32.87 million) the year before.
The Register adds that “accounting for interest income, interest payable and tax, HP banked £2.86 million ($3.71 million/€3.2 million) in net profit” – a fall of 84.6 percent from the previous figure of £18.67 million ($24.22 million/€20.9 million).
HP said the results were “in line with company expectations” and added: The gross profit margin decreased from 7.9 percent in the previous year to 6.2 percent in the current year on account of an increase in the cost of purchases for reselling. The profit before tax margin decreased from 1.9 percent in the previous year to 0.7 percent in the current year due to the strengthening of GBP in 2017 by 8.7 percent against USD, resulting in an exchange loss of £7.34 million ($9.52 million/€8.21 million).”
The value of GBP had previously sunk against the USD following 2016’s European Union membership referendum, although HP UK raised prices several times to offset this, with estimates from September suggesting its prices went up by 30 percent since June 2016.
Categories : City News
Tags : Financials HP OEM United Kingdom
