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Electrocomponents plc, the major electronic, electrical and industrial supplies high service distribution Group, today announces its results for the year ended 31 March 2002.
The highlights are as follows:
| Sales of continuing operations | £759.6m | Down | 7.8% |
| Operating profit of continuing operations* | £108.7m | Down | 17.0% |
| Profit before tax* | £105.5m | Down | 15.0% |
| Earnings per share* | 17.3p | Down | 14.4% |
| Dividend per share | 15.9p | Up | 15.2% |
| Net debt | £53.0m | Better by | £22.5m |
Mr Bob Lawson, the Chairman, commented:
I report against a background of exceptionally tough conditions in all geographic markets, particularly in the electronic and telecommunications manufacturing sectors.
In spite of the tough conditions, it is important to emphasise that management has continued the strategic development of the Group. This continued strengthening and enhancement of the Group's capability is critical to creating the platform to generate a superior and sustainable earnings stream. This enduring characteristic of Electrocomponents is the foundation block upon which future value is built. The growth potential of our businesses remains unchanged and will continue to be realised as economic conditions improve.
Since the end of March, the sales per day of the Group have been similar to that of the preceding three months. This is a welcome sign of improving month-on-month stability, though trading remains volatile. Since January, sales per day have increased modestly in Allied and our Asian businesses, have been stable in continental Europe and have declined slightly in the United Kingdom.
Leading indicators, such as the Purchasing Managers Indices, are now more positive on the prospects for recovery in our major markets, however, current manufacturing activity remains low. Based on our experience of previous cycles we anticipate that it will take some months before the positive moves in the indicators are reflected in our customers’ buying. We are focusing our sales and marketing activities on those customers best placed to benefit from recovery, including making full use of our newly extended internet capabilities. It is note worthy that our sales over the internet amounted to over £51m as a whole and grew by over 50%.
We are continuing to manage our gross margin, cost base and working capital effectively and consistent with a difficult trading environment. Our investments in initiatives critical to the longer-term strategy of the Group have been sustained and a major systems programme developed. We anticipate such investments continuing in the current year. Our financial robustness has been demonstrated by our ability to fund major investments and increase dividends whilst reducing net debt significantly. Net debt reduced from £75.5m to £53.0m, even after the considerable increase in capital expenditure including: investment in systems; e-Commerce development for all European markets and Japan; and the new warehouses for the Italian and German operations.
The Board recommends that the final dividend is increased by 15.2% to 11.0p to give a full year dividend increase of 15.2% to 15.9p. The dividend growth is underpinned by the exceptional ability of the business model to generate cash.
We have managed our businesses through this challenging year so that they remain well positioned to benefit from an upturn in our markets. Our confidence in being able to capitalise on the opportunities available to the Group is undiminished.
Bob Lawson
29 May 2002
Enquiries:
| Bob Lawson, Chairman | Electrocomponents plc | 0207 567 8000* |
| Ian Mason, Chief Executive | Electrocomponents plc | 0207 567 8000* |
| Jeff Hewitt, Deputy Chairman / Finance Director | Electrocomponents plc | 0207 567 8000* |
| Diana Soltmann / Andy Berry | Flagship Consulting Ltd | 0207 299 1500 |
The results and analyst presentation are published on the Corporate website at www.electrocomponents.com
