Electrocomponents cheers with modest rise in first half sales

14th Nov 2013 08:24

- H1 sales up 1.1 per cent- Market continued to be challenging- Signs of improvement in OctoberFTSE 250 distributor of electronics and maintenance products, Electrocomponents, posted a one per cent increase in sales for the half-year ended September 30th, driven by international growth, particularly in Europe and North America. The group said it saw international growth of 3%, but a decline of 3% in the UK, resulting in underlying sales growth of 1.1% for the group as a whole. The market environment was described as "challenging", reflecting continued uncertain economic conditions in many of its larger markets. However, the group was encouraged by what it sees as the most important indicator of its market conditions, namely the manufacturing Purchasing Managers Indices (PMIs), many of which gradually showed a return to the all-important market of 50 and above. Group gross margin at 45.4% was stable with the first half of last year, while headline operating costs at constant exchange increased by 1.3%. Headline profit before tax was £44.6m, an increase of £5.4m (13.8%) over the first half of last year, while reported profit before tax, which comprises headline profit before tax after reorganisation costs, increased by 21.5%. The interim dividend per share was maintained at 5p. Chief Executive Ian Mason said: "The group has delivered a solid performance in the first half, with an improved operating margin and strong free cash flow. Underlying sales growth rates have improved from 1% in the first half to 4% in both September and October."We have made good progress implementing our global strategy [which we believe] will enable us to grow our market share and improve our financial performance over the medium term."Looking beyond the period end, October group underlying sales growth was 4%. International grew by 5% and the UK declined by 1% (excluding sales of Raspberry Pi the UK was flat). Within International, Continental Europe grew by 6%, North America grew by 8% and Asia Pacific was flat. NR