The full-year results of electronic parts distributor Electrocomponents (ECM) reflect the fact that despite some modest sales growth since the March year-end, the business is still faced with an unpredictable global marketplace.
The challenge facing Electrocomponents was borne out by the fact that the Purchasing Managers Indices for all but one of the group’s major markets (US) pointed to a flat or contracting manufacturing sector through 2012. Hardly ideal conditions for a distributor like Electrocomponents that moves more than 550,000 electronics and maintenance products across the globe. The group also had to contend with a 1.7 per cent rise in operating costs (on a constant currency basis), while gross margins fell by 80 basis points to 46 per cent. Admittedly, management has been quick to address the need to keep a lid on costs, successfully implementing £4m in cost savings during the second half.
On an underlying basis, pre-tax profits fell by around a fifth to £98.7m, of which £10m of the shortfall was down to a combination of fewer trading days and adverse currency movements. Electrocomponents can take some encouragement from the fact that sales in the UK domestic market rose by 3.7 per cent to £375m, or 30 per cent of the total, while free cash flow improved by 6 per cent to £56.1m.
Panmure Gordon cut its 2014 EPS estimate from 17.45p to 16.6p (2012: 15.7p).
ELECTROCOMPONENTS (ECM) | ||||
---|---|---|---|---|
ORD PRICE: | 260p | MARKET VALUE: | £1.1bn | |
TOUCH: | 259.5-260p | 12-MONTH HIGH: | 280p | LOW: 194p |
DIVIDEND YIELD: | 4.5% | PE RATIO: | 18 | |
NET ASSET VALUE: | 87p* | NET DEBT: | 42% |
Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2009 | 0.98 | 96 | 15.2 | 11.00 |
2010 | 0.97 | 76 | 12.1 | 11.00 |
2011 | 1.18 | 114 | 18.0 | 11.00 |
2012 | 1.27 | 122 | 19.5 | 11.50 |
2013 | 1.24 | 91 | 14.4 | 11.75 |
% change | -3 | -25 | -26 | +2 |
Ex-div: 19 Jun Payment: 22 Jul *Includes intangible assets of £224m, or 51p a share |