Interim Statement


06/11/2006

Electrocomponents plc, the major international high service distributor of electronic, electrical and industrial supplies, today announces its results for the half year ended 30 September 2006.

SUMMARY RESULTS

H1 2005/06 H1 2004/05
Revenue £422.4m £396.8m
Profit before tax - headline* £36.3m £35.3m
Profit before tax - reported £35.6m £33.6m
Earnings per share - headline 5.5p 5.4p
Earnings per share - basic 5.4p 5.2p
Interim dividend per share 5.8p 5.8p
*Growth in headline profit before tax, adjusted for trading days 16% 

HIGHLIGHTS OF THE FIRST HALF

  • The strong revenue growth of our International business has continued with first half growth of 15% and all regions showing double digit growth. International revenue is now almost 60% of the Group.
  • The UK has returned to revenue growth and the new strategic direction is being implemented.
  • The headline profit growth, adjusting for the £4m impact of there being fewer trading days this half year, was 16%.
  • Further progress has been made on the Electronic and Electromechanical (EEM) strategy with the roll out of the Allied extended range to Asia Pacific, and the highly successful launch of leading-edge wireless and displays technologies in Europe.
  • The percentage gross margin was flat compared with the second half of the last financial year, after allowing for the change in business mix, due to the strong growth of our North American business with its lower gross margin.
  • Good operating cost leverage has been achieved in the International business and contribution increased by £4m.
  • Actions taken to reduce the cost base will achieve annualised savings of £6m out of the planned total of £10m by 2008. This includes £1m per annum benefit from the sale of the Head Office, which will also generate a £10m cash inflow in the second half.
  • The upgrade of the French enterprise business system was successfully concluded in September.
  • The interim dividend is maintained at 5.8p per share.

FOCUS FOR THE SECOND HALF

  • Roll out EBS across the European markets.
  • Continue to deliver more EEM strategy initiatives; October 2006 has seen a significant increase in the range of EEM products available in the new catalogues in the major European markets.
  • Implement the MRO strategy focused initially on the UK.
  • Continue implementation of the cost reduction plans.

Enquiries:

Ian Mason, Chief Executive Electrocomponents plc 0207 567 8000 *
Simon Boddie, Finance Director Electrocomponents plc 0207 567 8000 *
Diana Soltmann Flagship Consulting Ltd 0207 886 8440

The results and analyst presentation are published on the corporate website at www.electrocomponents.com

Definitions of terms: In order to reflect underlying business performance, comparisons of revenue between periods have been adjusted for exchange rates and the number of trading days. Changes in profit, cash flow, debt and share related measures such as earnings per share are at reported exchange rates.

Enterprise Business System (EBS): In order to make clear the costs of the EBS project and the underlying performance of the business, EBS costs have been disclosed separately. Therefore, unless explicitly stated, measures based on operating costs, contribution and process costs exclude EBS.

Headline profit: A charge of £0.7m (2005/06: £1.7m) was incurred in the half year for items excluded from headline profit. Details of the items are given below the Income Statement. Key performance measures such as return on sales and EBITDA use headline profit figures. Where profit growth is shown adjusted for there being fewer trading days the adjustment is made to the prior year.

Safe Harbour:
Our interim statement contains certain statements, statistics and projections that are or may be forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans and objectives for the management of future operations of Electrocomponents plc and its subsidiaries is not warranted or guaranteed. These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Although Electrocomponents plc believes that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, which may be beyond the control of Electrocomponents plc, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Other than as required by applicable law or the applicable rules of any exchange on which our securities may be listed, Electrocomponents plc has no intention or obligation to update forward-looking statements contained herein.

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