• Home
• About Us
• Investor Centre
• Press Centre
• Our Responsibilities
• Careers

Press Releases

Preliminary Statement

Electrocomponents plc, the leading high service distributor to engineers worldwide, today announces its results for the year ended 31 March 2008.

SUMMARY OF RESULTS

⁽¹⁾ Adjusted for exchange rates and the number of trading days

FINANCIAL HIGHLIGHTS

• Headline profit before tax growth of 12%.
• Continued strong revenue growth in our International Business of 8% with North America growing at 10%, Asia Pacific 15% and Europe 6%.
• The UK has continued to grow sales by 1% in the year and has delivered profit growth of £3m.
• Operating cost leverage delivered and the cost reduction target of £10m of annualised savings met.
• Strong cash flow of £75m, up by 66% on the prior year, driven by improving stock turn and lower capital expenditure.
• Increased return on capital employed from 21% to 24%.

OPERATIONAL HIGHLIGHTS

• Sales growth driven by the enhanced offer to R&D engineers with further new technology introductions, improved web functionality and joint supplier promotions.
• e-Commerce sales growing by 16% and e-commerce’s share of Group revenue exiting at 33%.
• 35% revenue growth in China driven by customer acquisition.
• Group gross margin stable for 18 months with the benefits of better product buying being delivered.
• The roll-out of EBS in Europe and Asia Pacific complete and benefits delivered including stock turn improvement from 2.7 to 2.9 times.

CAPITAL STRUCTURE AND DIVIDEND

• 2008 dividends maintained at 18.4p in line with the previous commitment.
• 2009 dividends to remain at 18.4p comprising an ordinary dividend of 11.0p and a special dividend of 7.4p.
• Progressive ordinary dividend policy to be pursued at earnings pay out ratio of 65%.
• Further returns supported by the Group’s strong balance sheet.

DRIVERS OF FUTURE PERFORMANCE

• Focus on fast growing international markets.
• Accelerate R&D and Maintenance offer development.
• Exploit the full potential of e-commerce.
• Leverage global infrastructure and increase operating margins.

HELMUT MAMSCH, CHAIRMAN, COMMENTED:

"This has been a successful year for the business with double digit headline profit growth, strong cash flow delivery, completion of the EBS implementation in Europe and the £10m cost reduction target being met. It is very pleasing to see that both the International and the UK businesses have delivered profit growth.”

“Going forward the Board has decided to pursue a policy in relation to future dividend payments and the Group’s capital structure that ensures that shareholders receive a sustainable dividend that is able to grow progressively with earnings in the future, whilst delivering an efficient balance sheet and financial metrics that assist investors to value the business on its fundamentals.”

IAN MASON, GROUP CHIEF EXECUTIVE OFFICER, COMMENTED:

“Over the last few years the Group has built a strong platform for growth with leading positions in growing international markets, world class global infrastructure and systems and a stable and profitable UK business. We are now well placed to drive future performance through International sales growth, accelerating R&D and maintenance offer development, exploiting the full potential of e-commerce, leveraging our global infrastructure and increasing operating margins.”

CURRENT TRADING AND OUTLOOK

In the first eight weeks of the new financial year Group revenue has grown at around 2% year on year. The International business has grown revenue by around 5% and the UK business has declined by around 2%.

While being mindful of general macro economic conditions the Board believes that the Group will benefit from its strong competitive position and its clear strategy to drive future performance.

Enquiries:

* Available to 15:00 on 28 May 2008, thereafter 01865 204000

The results and presentation to analysts 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 £1.0m (2007: profit of £0.8m) was incurred in the 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, EBITDA and ROCE use headline profit figures.

2007 (restated): in light of proposed amendments to IAS 38, Intangible Assets, the Group’s Directors have decided to make a voluntary change to the policy to write off catalogue production and print costs as they are incurred. There is no change to profit in 2008 and in 2007 pre tax profit increased by £2m. Further detail is provided in note 11.

Notes to editors:

Electrocomponents Group plc is the leading high service distributor to engineers worldwide. The company which was founded in 1937 is listed on the London Stock Exchange, employs around 5,700 people and has operations in 27 countries, serving another 38 countries through distributors. The Group satisfies the small quantity needs of its customers who are typically research and development ('R&D') or maintenance engineers in business. Electrocomponents sells around half a million products to 1.6m customers, through catalogues, over the internet and through trade counters. Some of the products the Group sells include electronic, electrical, mechanical, automation and health and safety components. The offer to engineers is valuable to many of our 2,500 suppliers, who would otherwise find the small order and immediate dispatch requirements of such customers difficult and costly to satisfy.

A large number of high quality goods are stocked, which are dispatched the same day that the order is received. The average customer order value is around £100 although the range of order values is wide. The Group has a large number of customers from a wide range of industry sectors with diverse product demands.

Download the full Preliminary Statement.

Download Adobe Acrobat Reader.