Shares in Premier Farnell (PFL) have staged something of a comeback since the launch of an operational review in December, but full-year figures again disappointed the market. Undoubtedly, another 40 per cent reduction in the dividend - this time directed at the final payout - knocked investor sentiment, but there are still signs that the electronic components distributor may not yet be out of the woods.
A geographical split of the business highlighted the problems that sparked last July's profit warning. A weak UK market led to a 3 per cent fall in European revenue to £347.9m, while the six months to January showed a similar year-on-year decline in sales in the Americas region. That, together with adverse currency movements, contributed to a 2.4 percentage point decrease in the gross profit margin, which according to interim chief executive Mark Whiteling faces further pressure this year. Somewhat surprisingly, the Asia Pacific region - which posted a 13 per cent jump in sales last year - provided one source of optimism.
Analysts at Jefferies downgraded full-year adjusted pre-tax profit to £55.1m, giving EPS of 11p, against £57.3m and 11.1p in 2015.
PREMIER FARNELL (PFL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 115.8p | MARKET VALUE: | £430m | |
| TOUCH: | 115.5-116p | 12-MONTH HIGH: | 205p | LOW: 88p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 21p* | NET DEBT: | 310% | |
| Year to 1 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 973 | 105 | 21.2 | 10.4 |
| 2013 | 952 | 69.0 | 13.3 | 10.4 |
| 2014 | 968 | 75.0 | 14.0 | 10.4 |
| 2015 (restated) | 887 | 54.1 | 10.0 | 10.4 |
| 2016** | 904 | 29.2 | 5.6 | 6.2 |
| % change | +2 | -46 | -44 | -40 |
Ex-div: 26 May Payment: 23 Jun *Includes £79.5m of intangible assets, or 21p a share **Year to 31 Jan | ||||
