Electrocomponents beats expectations

27th May 2011 07:14

Sales and profits were slightly ahead of expectations at electronics and maintenance products supplier Electrocomponents, on the back of strong sales growth in all geographic regions and online.Headline profit before tax in the year to 31 March was £114.0m, up from £74.4m the year before and ahead of market consensus of £113.5m.Revenue was 21.0% up to £1.18bn from £972.6m a year earlier, and ahead of market expectations of £1.17bn. Double digit percentage sales growth was seen in every geographic region, the group said.In the first seven weeks of the new financial year sales growth rates have remained strong at around 16% with the UK growing by 8% and the International business by 19%. Within International, Continental Europe has grown by 20%, North America by 18% and Asia Pacific by 17%."With 70% of the group's revenues now coming from the International business we are well placed to benefit from the long term structural growth opportunity along with improving margins from operating cost leverage. As a result we are recommending an increase in our final dividend of 8%," said Ian Mason, Electrocomponents' chief executive. The final dividend takes the full-year pay-out to 11.0p, below market expectations of 11.58p, but up 4.5% from last year's payment of 11p."Over half of our sales are now made through the web and we are continuing to enrich the online customer experience as we accelerate progress towards our target of 70% of group revenues coming from eCommerce," Mason said.As widely deduced in the broking community, the group's business in Japan was not directly affected by the country's earthquake disaster in mid-March. In the second half of March sales in Japan, which represent around 3% of the group, were at similar levels to the previous year.Gross margin eased to 49.0% from a restated 50.1% for 2010, but was ahead of broker Singer Capital Markets' forecast of 46.8% and an improvement on the first half level. Net debt contracted to £160.7m from £172.1m at the end of March 2010; Singer had predicted a much bigger easing of the debt situation, to around £147.9m. ---jh