Components distributor APC Technology has reported its first bottom-line profit in nearly three years as an 18-month turnaround plan begins to bear fruit.

The Rochester Airport-based firm, which sells electronic parts primarily to the defence and industrial sectors, managed a pre-tax surplus of £42,000 in the six months to the end of February.

This was up from a loss of more than £1 million over the same period last year despite revenues being down 12% to £8.3 million.

Turnover fell as the company reached the end of a loss-making contract to supply LED lighting to Morrison’s, which had pushed the firm into the red.

It had ventured into energy efficient lighting with its Minimise brand but in its interim report, the company said it had “re-centred on the proven business model of specialist electronic components”.

Its balance sheet was boosted by the sale of its Green Compliance Water Division in October for £1.8 million.

It cut administrative expenses by £1.2 million and made a gross margin 34%, helped by lower costs in its distribution business.

Operating profit reached £204,000 for the period, compared to a loss of £928,000 a year earlier.

In February the firm hired a new chairman, Tony Lochery, whose previous roles include being group managing director of Kwik Fit.

Chief executive Richard Hodgson said: “I am satisfied that all the effort that has been spent in the past 18 months in restructuring the group has resulted in a return to profitability and as the turnaround reaches its conclusion that we can focus fully on developing our core businesses.

“We are now very well positioned as a design-in, specification and distribution business in the markets we serve, for a return to profitable growth.”

The half-year results come days after the company hired ex-Vantis plc and FRP Advisory business recovery specialist Michael Thompson as finance director.

He took over from Art Russell, who joined in October 2015 from helicopter firm Avincis group, where he oversaw its £1.6 billion sale to FTSE 100 defence and engineering giant Babcock International.

Mr Russell has left to pursue other interests.