Trading Statement
Acal PLC
26 September 2005
FOR IMMEDIATE RELEASE 26 SEPTEMBER 2005
ACAL plc
(A leading pan-European, value added distributor providing specialist design-in,
sales and marketing services for international suppliers)
Pre-Close Period Trading Update
As anticipated at the time of the publication of our preliminary results in June
2005, trading conditions have continued to be tough, particularly in Continental
Europe for Electronic Components and in our IT Products division. The Group's
other activities have performed to expectations.
With shortfalls in sales in the Group's IT Products and Continental European
Electronic Components activities, and margin pressure in the former, Acal's
profit before tax for the six months ending 30 September 2005 will be around a
third lower than the corresponding period in the prior year. The sales
shortfalls seen in the first half will not be recovered in the second half. As
difficult trading conditions persist in some of our activities, the performance
for the second half is also likely to be affected.
Electronic Components
Although the UK Electronic Components activities have to date performed in line
with our expectations, trading conditions in Continental Europe deteriorated in
the first half of the current year and sales to date have fallen significantly
short of our expectations. However, in the past three months, orders in this
division showed growth of over 15% compared to the corresponding period in the
prior year. Whilst this growth is encouraging, the sales shortfall of the first
half will not be recovered in the second half.
We have made progress in obtaining new product lines and extending the
geographic coverage of existing ones, particularly in the Nordic region and the
UK, albeit later than expected. There have been no benefits in terms of sales
from these in the first half, whereas there have been additional costs in hiring
the relevant product specialists.
With an increasing need for pan-European coverage and product marketing support,
we have reorganised our Electronic Components activities into a single unit.
IT Products
In June 2005, we said "Demand in the IT Products activities remains weak and
often volatile, but we continue to develop our product range, concentrating on
higher margin value-added activities." These conditions have deteriorated during
the first half of the current year, with additional pressure on pricing and
margins, particularly in our Storage Networking activities. Sales have fallen
significantly short of our expectation, with further slippage in gross margins.
The UK activities will in future act as a centre of excellence with centralised
purchasing, technical and support functions and logistics. The overseas presence
will be limited to "customer-facing" activities. There have already been
management changes to reflect this structure.
IT Parts Services
Acal's IT Parts Services activities have performed ahead of last year, in line
with our expectations; further opportunities are arising for us to benefit from
the emerging trend for service organisations to outsource their parts management
and procurement.
Industrial Controls
This too has performed as expected.
The reorganisation of the Electronic Components and IT Products activities
described above will, over time, enable Acal to eliminate some duplication of
infrastructure across geographical territories, enabling better returns to be
produced.
The interim results for the half year ending 30 September 2005 will be announced
on 5 December 2005.
Acal will be releasing on 28 September 2005 an announcement which provides
unaudited summaries, re-stated in accordance with International Financial
Reporting Standards ("IFRS"), of its interim and full year consolidated income
statements and balance sheets for the financial year ended 31 March 2005. The
interim results for the half year ending 30 September 2005 will be the first
prepared by the Group under IFRS.
For further information:-
Tony Laughton - Chief Executive 01483 544500
Jim Virdee - Finance Director 01483 544500
Brian Coleman-Smith / Nia Thomas - Beattie Financial 020 7053 6400
Notes to Editors:-
1 The Acal Group is a leading European, value-added distributor providing
specialist design-in, sales and marketing services for international suppliers
in the fields of Electronic Components, Information Technology Products, IT
Parts Services and Industrial Controls. Its value-added philosophy and
geographic coverage enables Acal to provide specialist knowledge and support to
customers on a pan-European basis.
2 Design-in is the process by which Acal's sales engineers work with
customers and suppliers to procure components which meet the specific technical
and performance needs of the customers.
3 Acal has operating companies in the UK, Netherlands, Belgium, Germany,
France, Italy, Spain, Scandinavia and the USA.
This information is provided by RNS
The company news service from the London Stock Exchange