Azlan offers a high-tech lesson

The Investment Column

In its short life on the stock market, Azlan, a computer networking products distributor, has provided an A-Z of the risks and rewards of investing in hi-tech companies. Floated at 230p on a fancy multiple two- and-a-half years ago, the shares soon slid to a low of 118p after a profits warning led to David Randall, then managing director, being relieved of all executive duties. Into his shoes stepped Christian Martin, the former finance director. A focus on fewer suppliers, further expansion into Europe and a series of distribution deals with industry powerhouses such as IBM and Netscape have transformed Azlan's fortunes.

Yesterday, the shares jumped 26p to a new high of 665p after the group posted a 169 per cent rise in pre-tax profits to pounds 10.5m on sales more than doubled at pounds 196.5m. Stripping out first-time contributions from Italian, Dutch and Scandinavian acquisitions bought during the year, underlying turnover growth was still 90 per cent, while like-for-like profits grew by 145 per cent.

Technological change, not least the Internet, is driving this phenomenal expansion. Networking - enabling corporate computer users to operate more effectively - is the fastest growing information technology market after personal computers. According to analysts Dataquest, the market in Europe alone is expected to grow from $6.5bn to $8.6bn within two years. Azlan benefits because the market is so fragmented - a manufacturer alone cannot get a new product out to the tens of thousands of potential customers and dealers within its six to nine month shelf life.

Further progress is likely if Azlan can keep a tight hold on inventories, hold gross margins near the current 24 per cent and avoid fouling up on the Continent. House broker SBC Warburg looks for pre-tax profits of pounds 15.5m, implying a p/e in the high teens. The premium rating is deserved.

peoplePaper attempts to defend itself
voicesWe desperately need men to be feminists too
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits