Preliminary Results

RNS Number : 6890M

Electrocomponents PLC

28 May 2010

 



PRELIMINARY STATEMENT

Electrocomponents plc, the world's largest high service distributor of electronics and maintenance products, today announces its results for the year ended 31 March 2010.

SUMMARY OF RESULTS

'Investment in international markets, eCommerce and electronics driving second half growth'

	2010	2009	Change
Revenue	£972.6m	£974.6m	(5.0)%	(1)
Profit before tax - headline	£74.4m	£86.6m	(14.1)%
Profit before tax - reported	£76.0m	£96.5m	(21.2)%
Earnings per share - headline	11.8p	13.6p	(13.2)%
Earnings per share - reported	12.1p	15.2p	(20.4)%
Dividend per share	11.0p	11.0p	-
Free cash flow	£71.9m	£78.0m	(7.8)%

(1)  Underlying revenue growth, adjusting for currency and trading days.

Financial Highlights

·      Group revenue and profit impacted by economic conditions, particularly in the first half

·      Strong sales recovery in the second half with 6% sales growth, exiting at 15% growth in Q4

·      Delivered £18m of cost reductions with operating costs reduced by 5% year on year

·      Headline profit before tax of £74.4m, with second half growth of 11%

·      Strong free cash flow of £71.9m representing 137% of profit after tax

·      Robust financial metrics with interest cover of 20x and net debt to EBITDA of 1.6x

·      Dividends maintained at 11p per share

Operational Highlights

·      15% Group eCommerce sales growth, particularly strong performance in North America

·      Group eCommerce share of 43%, up from 36% last year, exiting at 46%

·      13 new websites launched across developing markets with local language and pricing

·      Strong electronics performance with 41,000 new products up from 10,000 last year

·      Launch of new web services for electronics design engineers including Component Chooser

·      Successful large customer acquisition programmes with 25 new accounts in the UK and Europe

CURRENT TRADING AND OUTLOOK

In the first seven weeks of the new financial year sales growth rates have increased further. Group revenue has grown by around 23%, the UK by around 11% and the International business by around 29%.  Within International, Continental Europe has grown by around 21%, North America by around 43% and Asia Pacific by around 29%.

While the sustainability of the economic recovery remains unclear and comparatives will become more demanding, this sales momentum, together with our continued investment in international markets, eCommerce and electronics, positions us well to make progress in the coming year.

IAN MASON, GROUP CHIEF EXECUTIVE, COMMENTED

"The business has come through an exceptionally volatile year of trading, in good shape.  Decisive action was taken on costs and a strong cash flow was maintained.  We also continued to invest in our strategy particularly in international markets, eCommerce and electronics, which helped to drive significant sales growth in the second half of the year.

The Group is a strong and well invested global business with a clear and focused strategy.  We will benefit from the structural growth in our international markets and continued delivery against our strategic initiatives."

Enquiries:

Helmut Mamsch, Chairman	Electrocomponents plc	020 7567 8000*
Ian Mason, Group Chief Executive	Electrocomponents plc	020 7567 8000*
Simon Boddie, Group Finance Director	Electrocomponents plc	020 7567 8000*
John Sunnucks / David Allchurch	Tulchan Communications	020 7353 4200

* Available to 15:00 on 28 May 2010, 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 (underlying revenue growth).  Changes in profit, cash flow, debt and share related measures such as earnings per share are, unless otherwise stated, at reported exchange rates.

Headline profit: net income of £1.6m (2009: net income of £9.9m) was reported in the year for items excluded from headline profit. Details of the items are given in note 5. Key performance measures such as return on sales, EBITDA and ROCE use headline profit figures. 

Notes to editors:

Electrocomponents plc is the world's largest high service distributor of electronics and maintenance products, with operations in 27 countries.  Founded in 1937 the business is listed on the London Stock Exchange and employs around 5,500 people.  Today, through our trading brands of RS and Allied, we offer 500,000 products through catalogues, the internet and at trade counters to 1.5 million customers and have a market-leading reputation for service excellence.  Our products, sourced from 2,500 leading suppliers, include electronics, electrical, mechanical, automation and health and safety components.

The business satisfies the small quantity needs of its customers who are typically electronics or maintenance engineers in business. 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's large number of customers is from a wide range of industry sectors with diverse product demands.

OVERVIEW AND STRATEGY IMPLEMENTATION

Electrocomponents is the world's largest high service distributor of electronics and maintenance products.  Two thirds of the Group's sales come from the International markets of Continental Europe, North America and Asia Pacific with one third from the UK.  eCommerce is our single largest channel, representing around 46% of sales at the year end.

The Group continues to concentrate on the following key areas to drive the Group's future performance:

·      Focus on international markets

·      Develop our electronics and maintenance offers

·      Exploit the full potential of eCommerce

·      Leverage our global infrastructure and increase operating margins

·      Maintain UK profitability

During the global economic downturn, we have continued to implement our strategy broadening our electronics offer and improving our web functionality. These initiatives, along with the improving macroeconomic environment, supported the return to sales growth in the second half of the year.   In February 2010 the senior management team hosted an investor day to outline the Group's strategy and its implementation.

Focus on International markets

The Group is the number one high service distributor in Continental Europe and Asia Pacific and is the third largest in North America.  The recent strategic focus has been to exploit further our strong market positions and world class infrastructure to deliver improved sales and profit performance.

In Continental Europe we have created a single regional management team with responsibility for directing activities across the countries in a consistent and effective way.  This has enabled pan-European electronics and maintenance marketing campaigns and supplier promotional programmes to be sent to around 500,000 customers across the region.

Our Asia Pacific team is driving further penetration of the rapidly developing China market and has focused on building on our leading market position, scalable infrastructure and high service to realise the significant growth potential.  Through its regional structure the team is focusing on three areas:  developing business with existing customers through its salesforce and product relevance, acquiring new customers and moving into new customer segments.

Allied, our North American business, has continued to implement its successful strategy based on local customer relationships facilitated by its extensive network of sales offices, strong supplier engagement programmes and developing eCommerce offer.  During the year, Allied's eCommerce sales grew by 77% and by the end of the year accounted for 32% of revenue.

Develop our electronics and maintenance offers

The Group already has a strong presence in the very large and rapidly growing electronics market with around 40% of the Group's sales being electronics products.  Through the implementation of our common global electronics strategy, we are further strengthening this position. Electronics was the best performing product category, by sales, in the Group.

We expanded our electronics range significantly across Continental Europe, the UK and Asia Pacific introducing 41,000 new products from major brand suppliers, including Microchip, Osram, Molex, Agilent and Tyco Electronics, building upon the 10,000 new products introduced in the previous year.  These ranges are focused on leading edge technologies including solid state lighting, solar power and thermal management as well as semiconductors.  The performance of our semiconductor range has been particularly strong with around 18% sales growth in the UK and Continental Europe with higher sales growth in Japan in the second half of the year.

We have recently developed and introduced a number of new and innovative web based services which are designed to help electronics design engineers to search, design and buy products from RS.  These include "Component Chooser" which allows our customers to search, compare and select electronics products, a computer aided design environment to view products in 3D and "RS EDP" a platform enabling the rapid prototyping and proof of concept of enabling systems.

Last year, we successfully launched our electronics production packaging capability across the UK, Continental Europe and Asia Pacific.  We have added further products during the year and the range has been expanded to over 65,000 components leading to significant sales growth for the year.

The Group has a leading position in the large and fragmented maintenance market globally and we have significant opportunities for growth.  Our maintenance strategy is to strengthen this leadership position by focusing on customers and technologies where we have competitive advantage, supplier partnerships, RS branded products and new eCommerce solutions.  An ongoing action supporting our strategy was the introduction of 8,000 new maintenance products during the year.

Large customers have been targeted and in the year we won 16 large customer accounts across Continental Europe.  Of these, five were on a pan-European basis leveraging the Group's extensive market presence in the region.  We have also increased our business with existing customers as our successful UK large customer compliance programme has been rolled out across Continental Europe.

We have increased our engagement with strategic maintenance suppliers.  With SMC, the world's leading pneumatics manufacturer, we have expanded the product range and developed a number of joint eCommerce activities including search engine marketing.  We have also started a programme that will see SMC transfer a number of its directly serviced customers to RS in the UK. 

The increased importance of RS branded products is another initiative which provides lower cost products with recognised high quality to our customers.  These currently comprise around 35,000 products and around 15% of the Group's global sales at attractive gross margins.  As new product technologies develop, we will add to RS branded products through our established global network of suppliers.  RS has already achieved this with the introduction of a range of energy efficient LED lamps whose market leading specification and competitive pricing has seen sales exceeding that of the branded manufacturer.

eCommerce is a further driver to support our maintenance strategy where we continue to evolve our service offer.  A recent example was the first market launch of a global eCommerce site accessed by mobile phone which has proved successful, growing in popularity with more than 160,000 customer visits per month.

The maintenance and electronics offers are sold to the same customers through a common infrastructure, creating significant synergies across the business.

Exploit the full potential of eCommerce

The eCommerce channel is increasingly central to delivering the Group's strategy and now represents around 46% of total sales and is growing rapidly.  The Group recently raised its longer term target for eCommerce revenue share to 70%.

eCommerce provides our customers with an improved service offer through the provision of more tailored information and marketing programmes, the rapid introduction of new products, provision of a wider product range and benefits from deepening our supplier relationships.  It also allows the business to reduce offline costs. The Group has a well developed eCommerce infrastructure with a single website platform across the UK, Continental Europe and Asia Pacific businesses.  These websites have real time links to the businesses' transaction systems providing our customers with online stock information and weekly content updates.

Our eCommerce strategy aims to improve our customers' end to end journey.  This starts at 'awareness' when customers research a product, to 'product selection' and then 'relationship management' which allows customers to manage their contact with the business online.  A number of actions have been taken this year including increasing paid search engine marketing, which has contributed to an increase of 18% in sessions on the RS site, improved search functionality on the RS website which has increased customer satisfaction, and the introduction of further enhancements to the 'my account' functionality.  The RS 'my account' now has 130,000 unique visitors per month.

The quote redemption tool and improved functionality introduced during the year, allow our customers to access and transact quotes online.  This has been further enhanced with the ability for customers to submit quote requests and automated product matching currently being implemented across Europe.  This market leading offer has proved successful with our customers delivering significant sales growth. 

eCommerce also supported growth in our larger customers through the implementation of eProcurement solutions. During the year we also established an Innovation function focusing on eCommerce opportunities, with the first concept to be delivered to our local market in France being an iPhone application.  This uses an image based search allowing engineers to send a picture of a component to RS for identification.

Supporting the International growth of the business 13 new websites were launched globally providing customers with a local language and priced product offer and services.

In North America, the website's functionality has been further enhanced, which, together with strong support from the local sales branches, has driven a strong underlying eCommerce revenue growth of 77% with the business exiting with an eCommerce revenue share of around 32%.

Group eCommerce revenue grew by 15% in the year and its share of revenue increased from 36% to 43%, year on year and exited at 46%.  The UK and Continental Europe regions both ended the year with eCommerce shares in excess of 50%.

Leverage our global infrastructure and increase operating margins

We have a global infrastructure including an RS eCommerce platform, integrated regional systems, centralised purchasing and supplier management, and global inventory, logistics and supply chain.

In light of the sales downturn in 2009 actions were taken, principally in the final quarter of the previous financial year, with a target to achieve annualised cost savings of £18m.  These included a net reduction of around 500 employees, representing around 8% of our workforce, as well as other significant measures including process optimisation between the UK and Continental Europe businesses.  Logistics activity was successfully redistributed between our two UK warehouses and we also benefited from recent freight tenders and further catalogue cost efficiencies.

In the year this cost reduction programme was the principal reason for the reduction in operating costs by around 5% at constant foreign exchange rates.  The accelerated implementation of these actions has meant that the full cost saving target of £18m has been achieved in 2010.  At the same time we continued to invest in our strategic priorities including electronics and eCommerce.

Maintain UK profitability

The profitability of the UK reduced in 2010 as the impact of the sales decline and reduction in gross margin, was only partially offset by the actions taken to reduce operating costs. 

The UK has a clear goal of returning its profitability to pre-recession levels:

·      Maintaining our leadership position for the high margin "immediate delivery" business

·      Leveraging the Group's improved customer offers, especially electronics and eCommerce

·      Developing new incremental regular revenue streams including corporate accounts and larger orders (orders over £1,000)

·      Continuing to manage gross margin, cost and cash effectively

In the year, the UK has made progress in implementing this strategy with 9 new large account wins, above market electronics performance, 7% eCommerce growth, large order sales growth and 8% cost reductions.  The UK business returned to sales growth in the second half of the year and grew by 9% in the fourth quarter.

OPERATING PERFORMANCE AND KEY PERFORMANCE INDICATORS

Operating Performance	2010	2009
Revenue	£972.6m	£974.6m
Gross margin	48.1%	49.5%
Headline contribution	£190.7m	£200.2m
Group Process costs	£(111.5)m	£(106.6)m
Headline operating profit	£79.2m	£93.6m
Interest (net)	£(4.8)m	£(7.0)m
Headline profit before tax	£74.4m	£86.6m
Free cash flow	£71.9m	£78.0m
Headline earnings per share	11.8p	13.6p
Dividend per share	11.0p	11.0p
Key Performance Indicators	2010	2009
Group sales growth(1)	(5.0)%	(5.3)%
International(1)	(4.7)%	(4.5)%
UK(1)	(5.6)%	(6.7)%
eCommerce revenue share	43%	36%
Headline Group return on sales(2)	8.1%	9.6%
Headline ROCE (3)	16.7%	18.5%
Stock turn (per year)	2.8x	2.7x
Revenue per head (4) (£'000)	175	170
Number of customers (millions)	1.5	1.5
Net debt to headline EBITDA	1.6x	1.7x
Interest cover (5)	19.6x	15.4x

(1)        Underlying revenue growth, adjusting for currency and trading days

(2)        Headline operating profit expressed as a percentage of revenue

(3)        Headline operating profit expressed as a percentage of net assets plus net debt

(4)        Revenue on a like for like basis (2010 and 2009) adjusting for trading days and foreign exchange

(5)        Based upon headline EBITA:  Earnings before interest, tax and amortisation (inc. government grants)

BUSINESS PERFORMANCE

Revenue

Group revenue was £972.6m, which was marginally lower year on year on a reported basis with the Group's revenue benefitting from Sterling's depreciation in the year, most notably against the Euro and the Dollar (7% at average rates).  On an underlying basis, revenue declined by 5% year on year.  The Group's sales performance improved throughout the year as the Group's strategic initiatives were implemented and the global economy showed signs of recovery.  The underlying sales decline of 15% in the first half was followed by 6% growth in the second half with all regions returning to growth in December.  During the final quarter of the year, and compared to the weak final quarter of the previous financial year, the Group's underlying revenue grew by 15%, with the International business growing by 19% and the UK business by 9%.  Within the International business Europe grew by 12%, North America by 28% and Asia Pacific by 26%.

Gross margin

Group gross margin at 48.1% declined by around 1.4% points year on year.  The majority of this decline was in the UK and was due to action taken to improve the price competitiveness of the electronics offer, foreign exchange, robust large customer performance and the growth of profitable lower margin new revenue streams.  These include larger orders and electronics production packaging.

Costs

Headline operating costs, at constant currency, were around 5% lower than the previous year.  This was due to the financial benefits of the Group's cost reduction programme that was implemented towards the end of the previous financial year as the severity of the economic downturn became apparent and the effect of lower year on year sales.   The Group has reduced its average employees year on year by around 500 heads which represents 8% of the total headcount.  The accelerated implementation of these actions has meant that the full cost savings target of £18m has been realised in 2010.

Although sales declined year on year, revenue per head increased by 3% to £175,000 reflecting the effects of the Group's cost reduction programme.

Profit before tax

Headline profit before tax was £74.4m, a reduction of £12.2m (14.1%) year on year.  The decline was principally due to a lower contribution from the UK business (£12.9m) together with higher Process costs (£4.9m) partially offset by an increase in contribution from the International business (£3.4m) and lower interest costs (£2.2m).

Reported profit before tax was £76.0m which benefitted from a one off net income of £1.6m in the second half of the year.  This one off net income, excluded from headline profit, comprised an accounting benefit of £1.9m due to the closure of the German defined benefit pension scheme to new members and future accrual, and the removal of the vast majority of the liabilities for active members through a cash settlement.  This was offset by some other reorganisation costs in Continental Europe and Asia Pacific totalling £0.3m.

Reported profit before tax was £20.5m below last year due to the £12.2m reduction in headline profit before tax and the £8.3m reduction in one off net income.  Whilst 2010 reported a net one off income of £1.6m this was £8.3m lower than in 2009 which benefitted from the changes to the UK defined benefit pension scheme.

Earnings per share

Headline earnings per share of 11.8p were around 13% below last year with the 14% reduction in headline profit before tax being partially offset by the reduction in the Group's effective headline tax rate of 1% point to 31%. 

Dividends

The interim dividend of 5p per share was paid in January 2010 and the Board is proposing to recommend the payment of the final dividend of 6p per share to be paid on 23 July 2010.  As a result, the dividends for the financial year will be maintained at the same level as the prior year at 11p per share.

Cash flow

The Group's free cash flow for the year was £71.9m representing 137% of profit after tax. This was after the payment of reorganisation costs associated with the Group cost reduction programme of around £5m and the payment of £2.9m to close the German defined benefit pension scheme. This strong cash performance was delivered through continued tight control over working capital, improving stock turn, debtor days reduced by around four days and capital expenditure being £11m below the level of depreciation and amortisation.

Financial position

The Group has robust financial metrics with interest cover of 20 times and a net debt to EBITDA ratio of 1.6 times, with significant headroom to the Group's banking covenants.

At 31 March 2010 net debt was £172.1m, which was £31.1m lower than last year, due to free cash flow of £71.9m exceeding dividend payments of £47.9m, with the balance largely being due to foreign exchange effects.  At 31 March 2010 the Group had committed debt facilities and loans of £305m and therefore headroom over net debt of £133m.

Year end net debt comprised gross borrowings of £177.6m (currency split: £72m US Dollars, £44m Sterling, £44m Euros, £9m Japanese Yen and the balance in other currencies) and financial assets of £5.5m. The currency mix is designed to help hedge the Group's translation exposures. The peak month end net borrowing during the year (using monthly exchange rates) was £194m.

The Group has a syndicated multicurrency facility from ten banks for US$137m, £142m and €47m maturing in September 2012. The Group also has other bilateral facilities of Yen800m, maturing December 2010, and an amortising bilateral of currently €1.8m, maturing December 2011.  In addition, during the course of the year the Group successfully issued $150m of Private Placement notes, split $65m maturing June 2015 and $85m maturing June 2017. $37.5m was received on 29 March and $112.5m will be received on 30 June. Cross currency interest rate swaps have been put in place to swap $60m from fixed $ to floating £ and $40m from fixed $ to floating €.

INTERNATIONAL

	2010	2009	Growth reported	Growth (constant exchange)
Revenue	£654.9m	£635.3m	3.1%	(4.7)%	(1)
Gross margin	47.7%	48.2%
Operating costs	£(201.8)m	£(199.2)m	(1.3)%	6.2%
Contribution	£110.5m	£107.1m	3.2%	(4.3)%
Contribution % of revenue	16.9%	16.9%

(1)        Underlying revenue growth, adjusting for currency and trading days

The International business is made up of three regions: Continental Europe (54% of the International business), North America (29%) and Asia Pacific (17%).  All these businesses have significant growth potential and through the last decade the International business has grown significantly from around 40% of the Group's revenue in 2000 to around 67% in the current financial year.

During the year, on a reported basis including the benefit of the weakening of Sterling, revenue increased by 3.1% and contribution by 3.2%. Underlying revenue declined by 4.7% with Continental Europe declining by 5.4%, North America by 5.3% and Asia Pacific by 1.6%.  Sales performance improved through the year: in the first half underlying sales declined by 17% while in the second half the International business grew by 8% exiting the fourth quarter with sales growth of 19%.

Gross margin was stable across the year; however, year on year the International gross margin declined by around 0.5% points.  The majority of this decline was in Asia Pacific.  In this region gross margin was impacted by action taken to improve the competitiveness of the offer in Japan.  The pricing of our semiconductor range was repositioned and large customer account business has been targeted.  As a result these segments have performed particularly strongly which has contributed to the second half underlying sales growth in Japan of around 20%.

The effects of the Group's cost reduction programme, implemented towards the end of the previous year, have led to operating costs (at constant currency) reducing by around 6% with costs reducing in all regions.  As a result, the International business has delivered cost leverage, with costs as a percentage of sales reducing by 0.5% points year on year.

The International contribution margin at 16.9% is the same as the previous year.

CONTINENTAL EUROPE

	2010	2009	Growth reported	Growth (constant exchange)
Revenue	£350.0m	£346.7m	0.9%	(5.4)%	(1)
Contribution	£78.3m	£75.9m	3.2%	(3.7)%
Contribution % of revenue	22.4%	21.9%

(1)        Underlying revenue growth, adjusting for currency and trading days

Our business is the largest high service distributor in Continental Europe.  It comprises eight operations, with France, Germany and Italy being the largest, and the smaller being Austria, Benelux, Ireland, Scandinavia and Spain.  The European businesses are supported by seven distribution centres, local language websites, a salesforce of 400 people and common transaction systems.

On a reported basis, including the benefit of the weakening of Sterling, revenue increased by 0.9% and contribution by 3.2%.  Underlying revenue declined by around 5.4% moving from an underlying decline in the first half of the year of 16% to growth of 5% in the second half, exiting in the fourth quarter with 12% sales growth.

The recent regionalisation of our Continental Europe business has been particularly effective in delivering sales and marketing programmes across the countries.  The region's marketing teams have created a number of highly effective and consistent customer campaigns to a mass customer audience across all the countries whilst at the same time improving efficiency.  We have engaged further with our suppliers with, for example, an innovative joint campaign with Fluke introducing a new product offering to the market.  In addition further up skilling of the large customer account teams has helped the region win five new large customer accounts on a pan European basis.

The region is driving towards increasing its eCommerce offer with the introduction of new web functionality such as the quote redemption tool and additional 'my account' functionality complemented by the rapid sharing of best practice across the countries. As a result eCommerce revenue grew by 14% with eCommerce revenue share increasing to 49% from 41% last year and exiting the year at 53% share.

NORTH AMERICA

	2010	2009	Growth reported	Growth (constant exchange)
Revenue	£191.5m	£186.6m	2.6%	(5.3)%	(1)
Contribution	£24.9m	£24.3m	2.5%	(4.6)%
Contribution % of revenue	13.0%	13.0%

(1)        Underlying revenue growth, adjusting for currency and trading days

On a reported basis, including the benefit of the weakening of Sterling, revenue increased by 2.6% and contribution by 2.5%.  Underlying revenue declined by 5.3% during the year moving from a decline of 19% in the first half of the year to growth of 12% in the second half, exiting in the fourth quarter at 28% growth.

The business's strong recovery was helped by the continued implementation of its successful strategy. This involved a strong sales and marketing focus supported by the local activities of the business's unequalled 54 sales offices across the region, strong supplier relationships and growing eCommerce offer.

The business significantly expanded its local product offer, exploiting in particular its strong relationships with strategic suppliers such as Tyco Electronics and Vishay.  In November 2009 the business hosted its Expo convention welcoming 100 key suppliers and creating stronger relationships between suppliers and our salesforce.

Larger customer accounts have performed strongly as the service offer and sales and marketing focus on this area has led to a number of key account wins.

Marketing during the year has been particularly innovative with the release of the business's first television commercial in September which together with social media marketing on Facebook, Twitter and YouTube contributed to significant new customer acquisition.

eCommerce revenue grew by 77% with eCommerce revenue share increasing to 28% from 15% last year and exiting the year at 32% share.  This strong performance was driven by improvements to the online quotation process, investing in increased search engine marketing and incentivising local sales offices to support the use of this channel. 

ASIA PACIFIC

	2010	2009	Growth reported	Growth (constant exchange)
Revenue	£113.4m	£102.0m	11.2%	(1.6)%	(1)
Contribution	£7.3m	£6.9m	5.8%	(9.9)%
Contribution % of revenue	6.4%	6.8%

(1)   Underlying revenue growth, adjusting for currency and trading days

In Asia Pacific, our regional business is the market leader with around 900 employees, 17 local sales offices and 13 websites in five languages delivering high service to our 200,000 customers.  The business has an unparalleled infrastructure in the region supported by its newly implemented regional structure.

On a reported basis, including the benefits of the weakening of Sterling, revenue increased by 11.2% and contribution by 5.8%.  Underlying revenue declined by 1.6% moving from a decline of 15% in the first half to growth of 14% in the second half, exiting in the fourth quarter with sales growth of 26%.

Costs were controlled across the region with the actions to reduce headcount in the previous year having a significant, beneficial effect.

During the year the business pursued the significant opportunities in the region through a number of consistent and focused initiatives.  In China this included the introduction of a programme aimed at the country's large engineering undergraduate population, the acquisition of customers in higher growth industrial regions and the targeted development of customers in Government investment areas such as oil, gas, wind power and railways.  In Japan we have repositioned the semiconductor offer and focused our sales and marketing on larger customers which has supported the business's 20% sales growth in the second half of the year.

Strategic supplier relationships are being further developed across the region, including a regional supplier meeting and joint marketing initiatives with strategic suppliers including Agilent and Fluke.

Customer service is a key focus area and we have recently been awarded customer service awards in Malaysia and Australia.

eCommerce revenue grew by 4% with eCommerce revenue share increasing to 35% from 33% last year.

UK

	2010	2009	Growth reported	Growth (constant exchange)
Revenue	£317.7m	£339.3m	(6.4)%	(5.6)%	(1)
Gross margin	49.0%	51.8%
Operating costs	£(75.6)m	£(82.6)m	8.5%	8.5%
Contribution	£80.2m	£93.1m	(13.9)%	(13.9)%
Contribution % of revenue	25.2%	27.4%

(1)        Underlying revenue growth, adjusting for trading days

UK revenue declined by 5.6%, moving from a decline of 13% in the first half of the year to growth in the second half of 2% exiting in the final quarter with growth of 9%.

Throughout the year the business has pursued a clear strategy of improving its customer offers and developing new incremental revenue streams whilst maintaining its UK high service leadership position.

The electronics offer has been further improved with 41,000 new products, production packaging and competitive pricing.  Electronics has been the best performing product category.  Large customer accounts have performed strongly through the year as more customer specific solutions have been deployed and the eCommerce offer has been better exploited.  Improved pricing and discount effectiveness initiatives have also been introduced.  These have led to the winning of 9 large customer accounts and the renewal of numerous existing large customer accounts against strong competition.

The successful flexible pricing offer is an example of a new profitable revenue opportunity which the business is pursuing.  This targets larger customer orders with a value of over £1,000 with a gross margin of around 40%.  This business grew by 9% in the year.  A significant opportunity still remains to expand this offer across a broader range of customers.

A number of online marketing campaigns have been deployed to address customer needs, for example value for money promotions and the use of price check data. eCommerce revenue grew by 7% with eCommerce revenue share increasing to 49% from 43% last year and exiting at 52% share.

Gross margin was 49.0% for the year, a decline of 2.8% points on the previous year.  This was due to action taken to improve the price competitiveness of the electronics offer, foreign exchange, robust large customer performance and the growth of profitable lower margin new revenue streams.  These include larger orders and electronics production packaging.

Operating costs have been reduced by £7.0m (8.5%) due to the impact of the prior year cost reduction initiatives, the ongoing impact of the Continuous Improvement programme, benefits from the strengthening of the business's non stock purchasing team and lower sales volumes.  As a result, operating costs as a percentage of sales have reduced by 0.5% points.

PROCESSES

	2010	2009	Change reported	Change (constant exchange)
Process costs	£(111.5)m	£(106.6)m	(4.6)%	(1.3)%
Costs % of revenue	(11.5)%	(10.9)%

The Processes have implemented a number of initiatives to support the Group strategy.  The Electronics division, created last year to accelerate our activities in this important area, has coordinated the introduction and global marketing of around 41,000 new electronics products across the Group and the launch of new web based services for electronics design engineers.  The eCommerce team have further developed the websites which has supported the 15% eCommerce sales growth.

Our Information Systems process has continued to manage the ongoing development of our Groupwide transaction system and the increasing investments in our eCommerce platform.

Supply Chain has continued to pursue its strategy of supporting the Group's increased product offer, with around 49,000 new products introduced during the year, whilst maintaining high customer service levels and realising cost reductions.  Key deliverables during the year included reduced transport costs and the successful redistribution of activity across the two UK warehouses.

Product Management, through the leveraging of our leading global position, has further developed and exploited its relationships with key strategic suppliers.  This has led to a successful and innovative joint campaign across the UK and Continental Europe with Fluke to promote a new product offering.

Process costs have increased by 1.3%, at constant foreign exchange, with the additional investment to drive the implementation of the Group's strategy in electronics and eCommerce being partially offset by the Group's cost reduction activities.

TAXATION

The Group's effective tax rate was 31% of headline profit before tax, which was 1% point lower than the prior year.  The Group's current effective tax rate includes the effect of a significant and continuing increase in the deferred tax liability due to the tax amortisation of overseas goodwill.  This deferred tax liability is not expected to crystallise in the foreseeable future.  This combined with a one off tax settlement and the impact of the phasing of tax payments resulted in a headline cash tax rate of 30% for the year.

PENSION

The Group has defined benefit pension schemes in the UK, Ireland and Germany.  All these schemes are closed to new entrants and in Germany the pension scheme is also closed to accruals for future service.

During the year, the Group consulted with local employees and the workers' council in Germany over proposed changes to the local defined benefit pension scheme.  These changes were agreed to, leading to the closure of the pension scheme to future accrual with future pension provision through a defined contribution scheme.  In addition around 85% of the scheme's active members, accepted a cash payment to settle their past service obligations.  The accounting effects of these actions were to book a total curtailment and settlement gain of around £4.8m offset by a charge of £2.9m representing the payment to members to settle their past service obligations.  The net accounting gain of £1.9m has been disclosed as net income excluded from headline profit reflecting the one off nature of the transaction.

The most recent accounting valuation of the UK defined benefit scheme was carried out as at 31 March 2010.  This disclosed a deficit of £10.2m before tax relief.  The scheme was 97% funded on an accounting basis.  The Group was not required to make any deficit recovery contributions to the pension scheme during the financial year.  This deficit is £3.9m higher than at the previous year end principally caused by the increasing value of liabilities due to changing discount rates and inflation assumptions partially offset by increased asset values.

Under IAS 19, the combined gross deficit of the Group's defined benefit schemes was £16.2m at 31 March 2010.

CURRENT TRADING AND OUTLOOK

In the first seven weeks of the new financial year sales growth rates have increased further. Group revenue has grown by around 23%, the UK by around 11% and the International business by around 29%.  Within International, Continental Europe has grown by around 21%, North America by around 43% and Asia Pacific by around 29%.

While the sustainability of the economic recovery remains unclear and comparatives will become more demanding, this sales momentum, together with our continued investment in international markets, eCommerce and electronics, positions us well to make progress in the coming year.

Ian Mason, Group Chief Executive

Simon Boddie, Group Finance Director

28 May 2010

Group Income Statement

For the year ended 31 March 2010

		2010	2009
	Note	£m	£m
Revenue	2	972.6	974.6
Cost of sales		(504.5)	(492.5)
Gross profit		468.1	482.1
Distribution and marketing expenses		(379.2)	(370.0)
Administrative expenses		(8.1)	(8.6)
Operating profit		80.8	103.5
Financial income		1.5	4.8
Financial expenses		(6.3)	(11.8)
Profit before tax	1,2	76.0	96.5
Income tax expense	3	(23.4)	(30.3)
Profit for the year attributable to equity shareholders		52.6	66.2
Earnings per share - Basic	4	12.1p	15.2p
Earnings per share - Diluted	4	12.0p	15.2p
Earnings per share - Headline	4	11.8p	13.6p
Dividends
Amounts recognised in the period:
Final dividend for the year ended 31 March 2009		6.0p	12.6p
Interim dividend for the year ended 31 March 2010		5.0p	5.0p
		11.0p	17.6p

A final dividend of 6.0p per share relating to the period has been proposed since the period end.

Headline profit
Headline operating profit
Operating profit		80.8	103.5
Pension changes/reorganisation (income)	5	(1.6)	(9.9)
		79.2	93.6
Headline profit before tax
Profit before tax		76.0	96.5
Pension changes/reorganisation (income)	5	(1.6)	(9.9)
		74.4	86.6

Consolidated Statement of Comprehensive Income

		2010	2009
		£m	£m
Profit for the year		52.6	66.2
Other comprehensive income
Foreign exchange translation differences		(7.5)	34.8
Actuarial (loss) on defined benefit pension schemes		(6.0)	(4.4)
Gain (loss) on cash flow hedges		6.3	(0.4)
Fair value of derecognised cash flow hedges		-	1.8
Taxation relating to components of other comprehensive income		0.2	(1.6)
Other comprehensive income for the year		(7.0)	30.2
Total comprehensive income for the year		45.6	96.4

Group Balance Sheet

As at 31 March 2010

		2010	2009
	Note	£m	£m
Non-current assets
Intangible assets	8	215.8	234.6
Property, plant and equipment	9	117.5	121.4
Investments		0.6	0.5
Other receivables		3.8	3.3
Other financial assets	10	1.7	-
Deferred tax assets		9.9	10.7
		349.3	370.5
Current assets
Inventories		182.7	180.8
Trade and other receivables		182.6	167.0
Income tax receivables		1.9	1.1
Cash and cash equivalents	10	5.5	2.0
		372.7	350.9
Current liabilities
Trade and other payables		(166.8)	(140.9)
Loans and borrowings	10	(10.7)	(4.0)
Tax liabilities		(13.1)	(15.2)
		(190.6)	(160.1)
Net current assets		182.1	190.8
Total assets less current liabilities		531.4	561.3
Non-current liabilities
Other payables		(9.6)	(9.1)
Retirement benefit obligations	7	(16.2)	(16.9)
Loans and borrowings	10	(168.3)	(201.2)
Other financial liabilities	10	(0.3)	-
Deferred tax liabilities		(33.9)	(31.3)
Net assets		303.1	302.8
Equity
Called-up share capital		43.5	43.5
Share premium account		38.7	38.7
Retained earnings		195.5	192.5
Cumulative translation reserve		29.5	36.7
Other reserves		(4.1)	(8.6)
Equity attributable to the shareholders of the parent		303.1	302.8

Group Cash Flow Statement

For the year ended 31 March 2010

		2010	2009
	Note	£m	£m
Cash flows from operating activities
Profit before tax		76.0	96.5
Depreciation and other amortisation		26.9	27.3
Equity settled transactions		2.4	1.2
Finance income and expense		4.8	7.0
Non-cash movement on investment in associate		(0.1)	(0.1)
Non-recurring non-cash pension change	5	(4.8)	(16.7)
Operating cash flow before changes in working capital, interest and taxes		105.2	115.2
(Increase) decrease in inventories		(3.7)	3.4
(Increase) decrease in trade and other receivables		(17.5)	28.0
Increase (decrease) in trade and other payables		30.5	(25.2)
Cash generated from operations		114.5	121.4
Interest received		1.5	4.8
Interest paid		(6.0)	(13.5)
Income tax paid		(21.7)	(22.9)
Net cash from operating activities		88.3	89.8
Cash flows from investing activities
Capital expenditure and financial investment		(16.4)	(12.1)
Proceeds from sale of property, plant and equipment		-	0.3
Net cash used in investing activities		(16.4)	(11.8)
Free cash flow		71.9	78.0
Cash flows from financing activities
Proceeds from the issue of share capital		-	-
New loans		24.7	143.1
Loans repaid		(45.3)	(171.0)
Equity dividends paid		(47.9)	(76.6)
Net cash used in financing activities		(68.5)	(104.5)
Net increase (decrease) in cash and cash equivalents		3.4	(26.5)
Cash and cash equivalents at the beginning of the year		0.8	27.2
Effect of exchange rates on cash		0.1	0.1
Cash and cash equivalents at the end of the year	10	4.3	0.8

Consolidated Statement of Changes in Equity

			Other reserves
	Share capital	Share Premium account	Hedging reserve	Own shares held	Cumulative translation	Retained earnings	Total
	£m	£m	£m	£m	£m	£m	£m
At 1 April 2009	43.5	38.7	(6.9)	(1.7)	36.7	192.5	302.8
Profit for the period	-	-	-	-	-	52.6	52.6
Foreign exchange translation differences	-	-	-	-	(7.5)	-	(7.5)
Actuarial (loss) on defined benefit pension schemes	-	-	-	-	-	(6.0)	(6.0)
Gain on cash flow hedges	-	-	6.3	-	-	-	6.3
Taxation relating to components of other comprehensive income	-	-	(1.8)	-	0.3	1.7	0.2
Total comprehensive income	-	-	4.5	-	(7.2)	48.3	45.6
Share based payments	-	-	-	-	-	2.4	2.4
Dividends paid	-	-	-	-	-	(47.9)	(47.9)
Related tax movements	-	-	-	-	-	0.2	0.2
At 31 March 2010	43.5	38.7	(2.4)	(1.7)	29.5	195.5	303.1
At 1 April 2008	43.5	38.7	(7.6)	(1.7)	3.9	205.0	281.8
Profit for the period	-	-	-	-	-	66.2	66.2
Foreign exchange translation differences	-	-	-	-	34.8	-	34.8
Actuarial (loss) on defined benefit pension schemes	-	-	-	-	-	(4.4)	(4.4)
(Loss) on cash flow hedges	-	-	(0.4)	-	-	-	(0.4)
Fair value of derecognised cash flow hedges	-	-	1.8	-	-	-	1.8
Taxation relating to components of other comprehensive income	-	-	(0.7)	-	(2.0)	1.1	(1.6)
Total comprehensive income	-	-	0.7	-	32.8	62.9	96.4
Share based payments	-	-	-	-	-	1.2	1.2
Dividends paid	-	-	-	-	-	(76.6)	(76.6)
At 31 March 2009	43.5	38.7	(6.9)	(1.7)	36.7	192.5	302.8

Notes to the Preliminary Statement

For the year ended 31 March 2010

1. Analysis of income and expenditure

	2010	2009
	£m	£m
Revenue	972.6	974.6
Cost of sales	(504.5)	(492.5)
Distribution and marketing expenses	(277.4)	(281.9)
Contribution before Process costs	190.7	200.2
Distribution and marketing expenses within Process costs	(103.4)	(96.8)
Administrative expenses within Process costs	(8.1)	(9.8)
Group Process costs	(111.5)	(106.6)
Headline operating profit	79.2	93.6
Net financial expense	(4.8)	(7.0)
Headline profit before tax	74.4	86.6
Pension changes/reorganisation income
Distribution and marketing expenses	1.6	8.7
Administrative expenses	-	1.2
Profit before tax	76.0	96.5

2. Segmental analysis

In accordance with IFRS 8 Operating Segments, Group management has identified its operating segments.  The performance of these operating segments is reviewed, on a monthly basis, by the Group Chief Executive and the senior management team (the Group Executive Committee).

These operating segments are: the United Kingdom, Continental Europe, North America and Asia Pacific.  The United Kingdom comprises operations in the United Kingdom and exports to distributors where the Group does not have a local operating company.  Continental Europe comprises operations in France, Germany, Italy, Austria, Denmark, Norway, Sweden, Republic of Ireland, Spain, the Netherlands and Belgium.  North America comprises operations in the United States of America and Canada.  Asia Pacific comprises operations in Japan, Australia, New Zealand, Singapore, Malaysia, Philippines, Thailand, Hong Kong, China, Chile and South Africa.

Each reporting segment derives its revenue from the high service level distribution of Electronics and Maintenance products. Intersegment pricing is determined on an arms' length basis, comprising of sales of product at cost and a handling charge included within Distribution and Marketing expenses.

			2010 £m	2009 £m
Revenue from external customers
	United Kingdom		317.7	339.3
	Continental Europe		350.0	346.7
	North America		191.5	186.6
	Asia Pacific		113.4	102.0
			972.6	974.6

			2010	2009
			£m	£m
Headline contribution
	United Kingdom		80.2	93.1
	Continental Europe		78.3	75.9
	North America		24.9	24.3
	Asia Pacific		7.3	6.9
	Headline contribution		190.7	200.2
Reconciliation of headline contribution to profit before tax
	Headline contribution		190.7	200.2
	Groupwide Process costs		(111.5)	(106.6)
	Net financial expense		(4.8)	(7.0)
	Headline profit before tax		74.4	86.6
	Pension changes/reorganisation (net credit)		1.6	9.9
	Profit before tax		76.0	96.5

			2010	2009
			£m	£m
Segment assets
	United Kingdom		232.5	230.0
	Continental Europe		148.3	151.5
	North America		259.5	266.7
	Asia Pacific		62.7	59.4
	Segmental assets		703.0	707.6
	Unallocated assets
	Cash at bank and in hand		5.5	2.0
	Deferred tax assets		9.9	10.7
	Income tax asset		1.9	1.1
	Other financial assets		1.7	-
	Total assets		722.0	721.4

			2010	2009
			£m	£m
Segment liabilities
	United Kingdom		105.9	80.2
	Continental Europe		51.2	58.4
	North America		16.3	10.6
	Asia Pacific		19.2	17.7
	Segmental liabilities		192.6	166.9
	Unallocated liabilities
	Income tax		13.1	15.2
	Deferred tax liabilities		33.9	31.3
	Loans and overdrafts		179.0	205.2
	Other financial liabilities		0.3	-
	Total liabilities		418.9	418.6

The Group derives its revenue from two main product types:

	2010	2009
	£m	£m
Electronics	373.0	363.1
Maintenance	599.6	611.5
	972.6	974.6

3. Income tax expense

	2010	2009
	£m	£m
United Kingdom taxation	5.4	14.7
Overseas taxation	18.0	15.6
Total income tax expense in income statement	23.4	30.3
Profit before tax	76.0	96.5
Effective tax rate	31%	31%
Effective tax rate - Headline	31%	32%

4. Earnings per share

	2010	2009
	£m	£m
Profit for the year attributable to equity shareholders	52.6	66.2
Pension changes/reorganisation (income)	(1.6)	(9.9)
Tax impact of pension changes/reorganisation	0.5	3.0
Headline profit for the year attributable to equity shareholders	51.5	59.3
Weighted average number of shares (million)	435.1	435.0
Earnings per share - Basic	12.1p	15.2p
Earnings per share - Diluted	12.0p	15.2p
Earnings per share - Headline	11.8p	13.6p

5. Pension changes/reorganisation (income) costs

Pension changes/reorganisation (income) costs arising in the year are as follows:

	2010	2009
	£m	£m
Redundancy costs	0.2	6.6
Pension scheme changes and curtailment	(1.9)	(16.7)
Other initiatives	0.1	0.2
	(1.6)	(9.9)

Pension scheme changes in 2010 represented a curtailment gain of £1.8m and a settlement gain of £3.0m for the German pension scheme (non-recurring non-cash pension changes).  These were partially offset by a Company cash payment of £2.9m to members to settle a proportion of the scheme's liabilities resulting in a net accounting credit of £1.9m.

6. 2010 final dividend

The timetable for the payment of the proposed final dividend is:

Ex-dividend date	23 June 2010
Record date	25 June 2010
Annual General Meeting	15 July 2010
Dividend payment date	23 July 2010

A final dividend of 6.0p per share relating to the period has been proposed since the period end.

7. Pension schemes

The principal assumptions used in the valuations of the liabilities of the Group's schemes were:

	2010 United Kingdom	Germany	Republic of Ireland	2009 United Kingdom	Germany	Republic of Ireland
Discount rate	5.40%	4.60%	4.60%	6.25%	5.90%	5.90%
Rate of increase in salaries	2.55%	3.00%	3.00%	2.55%	3.00%	4.00%
Rate of increase of pensions in payment	3.30%	2.00%	2.00%	3.00%	2.75%	2.75%
Inflation assumption	3.40%	2.00%	2.00%	3.00%	2.75%	2.75%

The expected long term rates of return on the schemes' assets as at 31 March 2010 were:

	2010 United Kingdom	Germany	Republic  of Ireland	2009 United Kingdom	Germany	Republic of Ireland
Equities	7.50%	n/a	7.50%	7.20%	n/a	8.50%
Corporate bonds	4.75%	n/a	n/a	5.75%	n/a	n/a
Government bonds	4.00%	n/a	4.00%	3.70%	n/a	4.50%
Diversified growth funds	7.00%	n/a	n/a	6.70%	n/a	n/a
Enhanced matching funds	3.70%	n/a	n/a	3.40%	n/a	n/a
Hedge funds	7.50%	n/a	n/a	n/a	n/a	n/a
Credit funds	6.50%	n/a	n/a	n/a	n/a	n/a
Cash	0.00%	n/a	n/a	0.00%	n/a	n/a
Other	n/a	n/a	3.77%	n/a	n/a	4.60%

Based upon the demographics of scheme members, the weighted average life expectancy assumptions used to determine benefit obligations were:

	2010 United Kingdom Years	Germany Years	Republic of Ireland Years
Member aged 65 (current life expectancy) - male	22.1	18.8	20.8
Member aged 65 (current life expectancy) - female	25.0	22.9	23.7
Member aged 45 (life expectancy at aged 65) - male	23.1	22.1	22.4
Member aged 45 (life expectancy at aged 65) - female	25.9	26.1	25.5

The net (income) costs recognised in the Income Statement were:

	2010 UK £m	Germany £m	Republic of Ireland £m	Total £m	2009 UK £m	Germany £m	Republic of Ireland £m	Total £m
Current service cost	3.6	-	0.1	3.7	4.9	0.7	0.1	5.7
Past service cost	-	-	-	-	(5.2)	-	-	(5.2)
Interest cost	15.2	0.4	0.2	15.8	17.3	0.5	0.2	18.0
Effects of curtailment	-	(1.8)	-	(1.8)	(11.5)	-	-	(11.5)
Effects of settlement	-	(3.0)	-	(3.0)	-	-	-	-
Expected return on assets	(14.9)	-	(0.1)	(15.0)	(19.0)	-	(0.2)	(19.2)
Total Income Statement (credit) charge	3.9	(4.4)	0.2	(0.3)	(13.5)	1.2	0.1	(12.2)

The valuations of the assets of the schemes as at 31 March 2010 were:

	2010 United Kingdom £m	Germany £m	Republic of Ireland £m	2009 United Kingdom £m	Germany £m	Republic of Ireland £m
Equities	86.8	n/a	2.0	79.9	n/a	1.2
Corporate bonds	17.4	n/a	-	14.4	n/a	-
Government bonds	6.1	n/a	0.4	16.5	n/a	0.4
Diversified growth funds	126.7	n/a	-	94.0	n/a	-
Enhanced matching funds	37.5	n/a	-	34.8	n/a	-
Hedge funds	15.8	n/a	-	-	n/a	-
Credit funds	12.2	n/a	-	-	n/a	-
Cash	2.1	n/a	-	0.7	n/a	-
Other	-	n/a	0.4	-	n/a	0.3
Total market value of assets	304.6	-	2.8	240.3	-	1.9

No amount is included in the market value of assets relating to either financial instruments or property occupied by the Group.

The amount included in the balance sheet arising from the Group's obligations in respect of its defined benefit pension schemes was:

	2010 UK £m	Germany £m	Republic of Ireland £m	Total Valuation £m	2009 UK £m	Germany £m	Republic of Ireland £m	Total Valuation £m
Total market value of assets	304.6	-	2.8	307.4	240.3	-	1.9	242.2
Present value of scheme liabilities	(314.8)	(5.2)	(3.6)	(323.6)	(246.6)	(9.4)	(3.1)	(259.1)
Deficit in the scheme	(10.2)	(5.2)	(0.8)	(16.2)	(6.3)	(9.4)	(1.2)	(16.9)

Sensitivity analysis of the impact of changes in key IAS 19 assumptions

Effect on obligation of a 0.1% increase to the assumed discount rate	Liabilities reduce by £6.4m
Effect on obligation of a 0.1% increase to the assumed inflation rate	Liabilities increase by £5.2m
Effect on obligation of an assumed increase in one year's life expectancy	Liabilities increase by £7.2m

8. Intangible assets

			Other
	Goodwill	Software	intangibles	Total
Cost	£m	£m	£m	£m
At 1 April 2009	182.9	124.1	0.3	307.3
Additions	-	7.0	-	7.0
Disposals	-	(4.0)	-	(4.0)
Translation differences	(10.7)	(0.5)	-	(11.2)
At 31 March 2010	172.2	126.6	0.3	299.1
Amortisation
At 1 April 2009		72.6	0.1	72.7
Charged in the year		14.8	-	14.8
Disposals		(4.0)	-	(4.0)
Translation differences		(0.2)	-	(0.2)
At 31 March 2010		83.2	0.1	83.3
Net book value
At 31 March 2010	172.2	43.4	0.2	215.8
At 31 March 2009	182.9	51.5	0.2	234.6

9. Property, plant and equipment

	Land and	Plant and	Computer
	buildings	machinery	systems	Total
Cost	£m	£m	£m	£m
At 1 April 2009	113.2	121.6	70.9	305.7
Additions	2.6	4.3	5.2	12.1
Disposals	(0.2)	(1.1)	(7.2)	(8.5)
Translation differences	(2.4)	(1.0)	(0.1)	(3.5)
At 31 March 2010	113.2	123.8	68.8	305.8
Depreciation
At 1 April 2009	28.4	96.2	59.7	184.3
Charged in the year	2.4	5.4	4.3	12.1
Disposals	(0.2)	(0.9)	(6.2)	(7.3)
Translation differences	(0.3)	(0.4)	(0.1)	(0.8)
At 31 March 2010	30.3	100.3	57.7	188.3
Net book value
At 31 March 2010	82.9	23.5	11.1	117.5
At 31 March 2009	84.8	25.4	11.2	121.4

10. Cash and cash equivalents / net debt

	2010	2009
	£m	£m
Bank balances	4.5	2.0
Call deposits and investments	1.0	-
Cash and cash equivalents in the balance sheet	5.5	2.0
Bank overdrafts	(1.2)	(1.2)
Cash and cash equivalents in the cash flow statement	4.3	0.8
Current instalments of bank loans	(9.5)	(2.8)
Bank loans repayable after more than one year	(143.6)	(201.2)
Private Placement Notes @4.41% due 2015	(10.6)	-
Private Placement Notes @5.14% due 2017	(14.1)	-
Fair value of swaps hedging fixed rate borrowings	1.4	-
Net debt	(172.1)	(203.2)

	2010	2009
Analysis of movement in net debt	£m	£m
Net debt at 1 April 2009	(203.2)	(151.1)
Free cash flow	71.9	78.0
Equity dividends paid	(47.9)	(76.6)
New finance leases	-	(2.3)
Translation differences	7.1	(51.2)
Net debt at 31 March 2010	(172.1)	(203.2)

11. Principal exchange rates

	2010	2010	2009	2009
	Average	Closing	Average	Closing
United States Dollar	1.60	1.52	1.72	1.43
Euro	1.13	1.12	1.21	1.08

12.  Basis of preparation

Electrocomponents plc (the "Company") is a company domiciled in England.  The Group accounts for the year ended 31 March 2010 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in a jointly controlled entity.  Subsidiaries are entities controlled by the Company.  All subsidiary accounts are made up to 31 March and are included in the Group accounts.  Further to the IAS Regulation (EC 1606/2002) the Group accounts have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use by the EU ("adopted IFRS").

The accounts were authorised for issue by the Directors on 28 May 2010.

The accounts are presented in £ Sterling and rounded to £0.1m.  They are prepared on the historical cost basis and adopt the going concern basis.

The preparation of accounts in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.   The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values and liabilities that are not readily apparent from other sources.   Actual results may differ from these estimates.

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 March 2010 or 2009.  Statutory accounts for 2009 have been delivered to the Registrar of Companies, and those for 2010 will be delivered in due course.  The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 237 (2) or (3) of the Companies Act 1985 in respect of the accounts for 2009 nor a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2010.

Copies of the Annual Report and Accounts for the year ended 31 March 2010 will be available from 15 June 2010 from the Company Secretary, Electrocomponents plc, International Management Centre, 8050 Oxford Business Park North, Oxford OX4 2HW, United Kingdom.  Telephone [phone].  The Report will also be published on the Corporate website at www.electrocomponents.com.

The Annual General Meeting will be held at Electrocomponents plc, International Management Centre, 8050 Oxford Business Park North, Oxford OX4 2HW, United Kingdom on Thursday 15 July 2010 at 12.00.

Safe Harbour:

This preliminary 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.

 

END

 

 

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