Premier Farnell has enjoyed a considerable rerating recently, and the half-year results justify this with the best sales and operating profits for 10 years in the second quarter. And shareholders’ funds have now moved into positive territory. Profits are on a roll, with underlying growth of 73 per cent in the second quarter, more than quadrupling in North America, as MDD’s sales accelerated.
Other encouraging straws in the wind are that sales into higher technology electronic design engineering (EDE) markets now account for half of total electronic distribution sales, while web sales account for 46 per cent of sales, which is helping to boost market share. Premier continues to tap into new growth markets, too. Sales more than doubled in China, and jumped by 78 and 82 per cent respectively in India and Eastern Europe, and Premier has now pushed into Thailand, Taiwan and South Korea. And the momentum is being maintained into the second half, with sales last month up by over a quarter.
Clearly from now on quarterly comparisons will get tougher, but Deutsche Bank expects that full-year profits will rise from £54mm to £88m (EPS up from 10.7p to 16.9p) where the PE ratio is 15.
PREMIER FARNELL (PFL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 248p | MARKET VALUE: | £911m | |
| TOUCH: | 247 - 248p | 12-MONTH HIGH: | 253p | LOW: 141p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 0.4p* | NET DEBT: | £262m | |
| Half-year to 1 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 388 | 25.2 | 4.80 | 4.20 |
| 2010 | 497 | 46.0 | 9.00 | 4.40 |
| % change | +28 | +83 | +88 | +5 |
Ex-div: 22 Sep Payment: 20 Oct *Includes intangible assets of £57.7m, or 16p per share | ||||
