abacus group plc
annual report  accounts 2005
abacus house
bone lane
newbury
berkshire
rg14 5sf
wwwabacusgroupcouk
abacus group plc annual report  accounts 2005 the abacus group is a leading franchised distributor of electronic components flatpanel
displays printers and related products and provides additional value added services
including technical support cable and electromechanical subassembly and the design
and build of display systems
the group employs approximately 750 people and has 9 principal trading businesses
operating in the uk eire benelux scandinavia and italy
the group’s philosophy is to offer as wide a product range as possible in order to be in
tune with the widespread market trend towards supply chain management and vendor
reduction to work at design level with both existing and new customers in order to be
involved in the proliferation of new products that typifies the electronics industry and to
combine these features with an unusually high level of personal service and commitment
the group has a continual programme of investment to ensure that the logistics and
systems are in place to support and further these aims
contents
financial and operational highlights 1
abacus group at a glance 2
chairman’s statement 4
chief executive’s review 6
financial review 9
the board of directors secretary and advisors 11
directors’ report 12
corporate governance statements 17
corporate social responsibility 22
directors’ remuneration report 24
statement of directors’ responsibilities 32
auditors’ report 33
financial statements 34
five year summary 56
notice of annual general meeting 57
form of proxy 59
geographic coverage ibc abacus group plc 1
financial and operational highlights
2005 was in line with the board’s expectations as announced in the july trading
update notwithstanding the weakness exhibited by our markets the business
has performed ahead of the competition gaining market share we believe we
are well placed for 2006


Summary:
 6 abacus group plc
chief executive’s review
general review
the growth in our business in 2004 particularly in the uk and
eire did not continue as we moved into 2005 and by the end
of our financial year the various industry association statistics
showed a market decline of 8 in the uk and eire 8 in the
nordic region and 2 in italy creating an overall decline in the
regions in which we operate of 58
compared to this our overall sales decline was 51 and in
the uk where we saw growth in trident ctl and ccs our
overall decline was 2 leading to a strong improvement in
our market share from 14 to 15
trident performed particularly well and despite billings on its
medical contract not meeting our expectation as indicated 
in our july trading update its growth in 2005 was 21
compared to 2004
the challenging condition in the markets we serve has
ensured that they remain extremely competitive and in these
circumstances it is pleasing to see that our strong focus
on gross margin before exceptionals throughout the 
group has enabled us to improve this to 232 for 2005
before exceptional items from 229 in 2004 this has
allowed us to maintain the appropriate level of headcount 
to support the workloads which did not decline throughout
our business and therefore to preserve our reputation for
first class service and support with both our customers
and suppliers
individual company review
we have continued to approach the component distribution
market with regional sales offices and local warehousing 
thus distinguishing ourselves from our major competitors 
this “local” service justifies why existing and new customers
should see the abacus group as their key supplier and gives
component manufacturers a strong rationale for choosing 
the abacus group as a strategic partner
the non ecd businesses within the group have performed
better in 2005 than 2004 demonstrating that by investing in
the right areas growth can still be achieved despite declining
markets
abacus polar the uk and eire based component distribution
business has seen its sales decline in line with the market
notwithstanding this it has continued to focus on taking new
products to existing and new customers as a key part of its
overall strategy this combined with the new customer
opportunities and new franchise awards that arose from the
demise of eurodis and our subsequent purchase of its uk
business information puts abacus polar in a strong position
in the uk and eire markets as we move into 2006
micromark ccd continues to approach the uk and eire
market in a different way to abacus polar thus giving
customers and suppliers a choice as to which of the abacus
group’s businesses they deal with indeed some trade with
abacus distribution centre
“
we start the new year with clear signs of stability in all the areas in which we operate and with our uk
and eire market share improved to 15 these are sound foundations on which to build our business and
with the growth opportunities created by our investment in trident and tdc outside of the uk combined
with new customer and franchise opportunities for our uk and eire component distribution businesses 
we enter 2006 with a sense of confidence
” abacus group plc 7
both based on their own individual requirements we believe
that the size of the uk and eire market just under £1billion
based on afdec statistics supports this strategy micromark
ccd is also seeing benefits from the demise of eurodis
promax our nordic component distribution business
continues to have a good position in the danish market 
with just over 5 market share based on europartners 2005
report but has less in the other markets a strategic review of
our business and the individual markets’ performance resulted
in us taking the decision in quarter 4 to close our operation
in finland and reduce our overall headcount to reflect the
expected sales level during the year the uk based it
platform introduced at the end of 2004 has resulted in an
improved gross margin and this combined with the lower
overhead and the introduction of new franchises in the
wireless module area puts promax in a much improved
position to produce a more satisfactory result in 2006
ecc our italian component distribution business has seen
its share fall to 34 in a market that has only declined by
2 but despite this it has remained profitable and we are
therefore able to invest to strengthen it for the future this
investment is in the form of products in identified growth areas
such as wireless modules and displays in conjunction with
trident together with the appropriate relevant technically
qualified personnel to support both existing and new
customers we are confident that ecc can continue to 
build on its good position in the italian market which based
on europartners 2005 report places it fifth
tdc our uk and eire based distributor of components for the
wireless and wired communications area which was acquired
in 2004 has met the expectations set for it in this niche market
which we believe offers growth potential as with all new
products the market expectation of price is one of less rather
than more as products mature and this has been the case
with tdc where average selling prices have fallen by 15
during 2nd half 2005 compared to 1st half 2005 however
over the same period sales have remained level and tdc
continues to bring new opportunities to the group not only 
in the uk and eire but in nordic and italy as we expand the
franchise coverage into these regions
trident our display and system build business has performed
well despite the lower than expected billing against its major
medical contract and its sales grew by 21 in 2005 we have
continued to expand coverage outside of the uk and eire
and in particular enhanced its nordic operation at the end 
of 2005 by employing ex eurodis personnel who brought with
customer sectors
power 24
contract manufacturing global 21
defence 17
automotive  16
consumer  16
lighting 14
avionics 124
navigation 12
thermoregulation 04
others 16
contract manufacturing local 307
ind control 138
instrumentation 87
fire  security 80
printer peripheral 56
comms 55
audio visual 516
medical 43
distribution 30 them excellent product and customer knowledge we have
also employed additional personnel in italy and benelux and
this build up of staff combined with good franchise support
puts trident in a strong position as we move into 2006
ctl and ccs our electromechanical assembly businesses
focused on the uk markets both saw growth in 2005 despite
the competitive nature of the market in which they operate
their key strength is to offer a very flexible lead time on
manufacturing for those customers who have consistently
changing demand patterns we believe this fits well
with companies which wish to keep manufacturing local
but at the same time seek to outsource all or part of their
own production
dubilier our ‘own brand’ component business which has 
the majority of its sales in the uk eire and nordic region
continued to see the average selling price of its passive
products fall by a further 6 in 2005 over 2004 these
products now represent less than 80 of the total sales of
dubilier as we continue to introduce new products particularly
in the electromechanical area the challenge for 2006 is to
continue to introduce ‘non passive’ products and expand the
geographical sales coverage both of which may well be
assisted by the acquisition strategy for our component
distribution business
outlook
one of the challenges we face as a component distributor
serving the european market is to address the migration of
manufacturing from established markets to those offering a
reduced cost base such as the former eastern european
countries and asia pacific particularly china a number of
these customers prefer to manage the supply chain in the
country where they are based and today we ship directly to
these developing regions from the uk for such customers
however we recognise the need to offer a level of local
support in the country of manufacture and will from the
beginning of 2006 open an office in hong kong to supervise
asia pacific shipments also we have formed a commercial
alliance with a local distribution company in poland to sell
direct to abacus customers located there
we start the new year with clear signs of stability in all the
areas in which we operate and with our uk and eire market
share improved to 15 these are sound foundations on
which to build our business and with the growth opportunities
created by our investment in trident and tdc outside of the
uk combined with new customer and franchise opportunities
for our uk and eire component distribution businesses we
enter 2006 with a sense of confidence our objective for the
group is to achieve an acceptable return based on a solid
performance in challenging markets where sales will be
achieved by providing an excellent service combined with 
the identification of new products and market areas
we also look forward to the opportunity to integrate deltron
into the abacus group which we believe will strengthen our
relationship with both customers and suppliers and create 
an even stronger base on which to build
martin kent
chief executive officer
22 november 2005
8 abacus group plc
chief executive’s review continued
trident supply zevo smart terminals for 
nhs patient power project