Profits drop again in distribution sector, says survey

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Profits and cash flow have continued to decrease in the distribution sector, according to a survey by Euler Hermes UK.

The Cash Flow and Profit Survey of UK Companies (Q2 2009) showed the current period of falling profits has now extended to seven quarters. However, the pace of decline has decreased since the previous quarter, but it still remains substantial.

Distribution sector firms also expect cash flow to decrease again over the coming 12 months.

The survey found the latest fall was largely due to heavy price discounting as demand in both domestic and overseas economies remained fragile, as well as higher raw material prices.

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