Strip out currency headwinds and these half-year results from Premier Farnell (PFL) look much better. Like-for-like sales grew 3 per cent, with 4.7 per cent growth in the second quarter. The recovery may finally be underway for the electronics distributor, which has been restructuring against a backdrop of subdued global demand for semi-conductors.
In the core marketing and distribution division, weak growth in Europe and the US, particularly in the first quarter, was offset by booming sales in the Asia Pacific region. The smaller industrial products division, which makes high-tech components for fire-fighting, also performed well, with underlying sales up 7 per cent. Overall, pre-tax profits crept 2.4 per cent higher to £38.8m, though this was wiped out by £2.3m of restructuring costs.
Chief executive Laurence Bain said his restructuring plan, which will see the group's Americas, Europe and Asia Pacific divisions integrated to better reflect how customers operate, should accelerate top-line growth to about 6 per cent and push the return on sales into double digits (the pre-tax profit margin was 8 per cent during the half). Announced in June, the plan is also expected to produce cost savings of between £6m and £8m in the 2015-16 financial year, at a cost of £8m.
Broker Jefferies expects pre-tax profits of £80.3m for 2014-15, giving EPS of 15.0p (up from 14.2p).
| PREMIER FARNELL (PFL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 193p | MARKET VALUE: | £ 717m | |
| TOUCH: | 192.6-193p | 12-MONTH HIGH: | 248p | LOW: 175p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 23p* | NET DEBT: | 280%** | |
| Half-year to 3 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 498 | 38.1 | 7.1 | 4.40 |
| 2014 | 479 | 36.4 | 6.8 | 4.40 |
| % change | -4 | -4 | -4 | |
Ex-div: 24 Sep Payment: 23 Oct *Includes intangible assets of £80.1m, or 22p a share **Including preference shares | ||||
