Electrocomponents PLC
29 March 2007
Embargoed until 7.00am 29 March 2007
Electrocomponents plc - Trading Update
Electrocomponents plc, the leading global high-service distributor of
electronic, electrical and industrial supplies, is today giving a trading update
ahead of its results for the year ending 31 March 2007.
The implementation of the Group's strategy is proceeding well and, while there
remains much work to do, customers are valuing our improved EEM and MRO offers,
evidenced by the Group's strong revenue growth.
In the second half of the year, Group revenue (adjusted for exchange rates and
trading days) has continued to grow at around 9%. Within this, the
International business has grown by around 13.5%, slightly lower than the 15% in
the first half, and in the UK, business growth has increased to around 2.5%,
from 1% in the first half. The strengthening of Sterling, particularly against
the US Dollar, will reduce the Group's reported revenue growth to around 5% in
the second half.
The Group's gross margin in the second half of the year has been slightly lower
than in the first half, due largely to the strong growth of our North American
business, which has lower margins.
The building of a new warehouse and office in North America is proceeding to
plan, with the move to the new facility expected to be made in the middle of the
next financial year. One-off move costs of around £1m are expected to be
incurred in the next financial year.
The Enterprise Business System went live successfully in Germany, Italy and
Austria in January. 90% of the UK and European revenue is now on the EBS
platform. EBS costs for the financial year are expected to be around £20m
versus £25m last year. The remaining EBS implementations in Europe (comprising
four further businesses) are scheduled for the first half of the next financial
year.
The Group has maintained its tight control of costs, which have fallen as a
percentage of revenue.
The head office move has been completed giving benefits of around £1m per annum
and a profit on sale of around £2m. The total annualised benefit of the ongoing
programme to create a lower cost infrastructure is now around £7m, against the
target of £10m.
The Board anticipates that headline Group profit before tax for the year ending
31 March 2007 (adjusted for reorganisation costs and the profit on the sale of
the head office building) will be at the upper end of our expectations.
The full results for the year will be announced on 30 May 2007.
There will be a telephone conference call today at 09.00am for analysts and
investors. Dial-in instructions are set out below.
Enquiries:
Ian Mason Group Chief Executive 01865 204000
Simon Boddie Group Finance Director 01865 204000
Diana Soltmann Flagship Consulting 020 7886 8440
Details of telephone dial-in instructions:
Date: 29 March 2007
UK Time: 08:50h for 09:00h
UK Local Call Dial-In: 0845 302 2569
UK Free Call Dial-In: 0808 2380678
Europe & International Dial-In: + 44 (0) 1452 587 436
Canada Toll Free Dial-In: 1866 645 2898
USA Toll Free Dial-In: 1866 854 5856
Quote Reference Number: 3046752
Chairman: Ian Mason
Electrocomponents plc
Safe Harbour Statement:
This announcement 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, many of which are 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.
This information is provided by RNS
The company news service from the London Stock Exchange
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