Half-year results from electronics distributor, Electrocomponents, easily beat analysts' expectations, which helped push the shares up 6 per cent on the day the figures appeared. Growth was especially solid, with organic growth being driven by the international operations - these now generate 70 per cent of revenue, up from 40 per cent a decade ago.
Exploiting its local base of 54 sales offices, the north American operation grew sales 41 per cent in the period to £132m, while Chinese demand meant the group's Asia Pacific operation saw sales rise 27 per cent to £73m. Winning 19 large contracts, compared with nine in the previous period, helped the continental European business increase revenues by 23 per cent to £187m - UK sales alone jumped 14 per cent. Electronics was the best performing product category as 18,000 new goods were introduced, while eCommerce gained from better online search capability and the group's very own social media tool, DesignSpark.
A 5 per cent fall in costs, as a percentage of sales, also helped profits, which grew despite negative foreign exchange movements and higher interest costs after the group fixed its debt for longer. KBC Peel Hunt has upgraded its full-year adjusted pre-tax profit forecast by 20 per cent to around £107m, giving adjusted EPS of 17p (2010: £76m/11.8p).
ElECTROCOMPONENTS (ECM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 265p | MARKET VALUE: | £1.15bn | |
| TOUCH: | 265-266p | 12-MONTH HIGH: | 267p | LOW: 156p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 72p* | NET DEBT: | 52% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 447 | 24.8 | 3.90 | 5.00 |
| 2010 | 563 | 50.5 | 8.00 | 5.00 |
| % change | +26 | +104 | +105 | |
Ex-div:08 Dec Payment:14 Jan *Includes intangible assets of £207m or 47p a share | ||||
