An electronic components distributor and sustainable energy company has swung back into operating profit after overstretching itself on projects which put it in the red.

APC Technology, based in Strood, is still expecting to make a loss of £4.6 million for the year to the end of August after taking a £12.8 million hit on the costs of exiting some parts of its business.

However, operating profit is likely to reach £300,000, up from a £1.4m underlying deficit last year, with gross margins growing to £35.8% compared to 26.3%.

APC Technology also runs Minimise Energy, a sustainable technologies business, which played a large part in creating its negative balance sheet.

It overstretched itself when it committed huge resources to the installation of LED lighting at supermarket chain Morrisons.

The company also suffered losses last year from the cost of ferrying the lighting from its manufacturers in the Far East and the subsequent price of stockholding and warehousing it.

It has since carried out a series of redundancies, reducing its headcount from 91 to 76 since the year end.

Despite the troubles at Minimise, its core component distribution business managed a record £4.1 million of bookings in the first quarter of the year, up from £3.5 million a year earlier.

Meanwhile, its “refocused and profitable” lighting technologies business delivered a £1 million order to a major high street food and clothing retailer in the first three months of the year.

Overall revenues for the first quarter reached £4.5 million.

In a trading update, chief executive Richard Hodgson said the 12 months to the end of August had been a “difficult year” for the group which “necessitated many hard decisions” as it terminated or sold its non-core businesses.

He said: “I am very pleased with the solid start we have made to this new financial year, with the restructuring behind us and with a realigned business focused on our core competency of design, specification, and distribution of specialist technologies.

“This is a business that we have historically done well and which has proven to be profitable and cash generative.”