Northamber admitted it is “difficult to be other than somewhat pessimistic in the near term” as it issued an interim management statement today.

In the update for its third quarter ending March 31, the veteran distributor confirmed an earlier “slight improvement in trading”. But, it continued, gross margins continued to be under pressure “as a result of continued price deflation” - though it offset this by reducing operating costs.

It said that: “Since the end of our third quarter, increasingly difficult general market conditions clearly indicate why the market in our own sector is also deteriorating.”

But: “To the extent that this is a result of the generally accepted impact of the 'credit crunch', the likely effect on trading is difficult to quantify.”

Northamber struck a 'back to basics' note, saying: “The inherent value of cash is increasingly becoming the predominant comparative in this sector, as a result of the levels of trading risk and unrewarding revenue opportunities.”

It went on to point at its own cash cushion, with £11m cash “prior to the recent capital reorganisation and £2.9 million returned to shareholders following the sale of the Arbroath investment property”.

All the same: “The Board believes we shall continue to perform relatively reasonably, though it is difficult to be other than somewhat pessimistic in the near term.” ®