Electronics and industrial components distributor Premier Farnell has turned a corner, sparking a share price bounce. And while full-year operating profit slipped 26 per cent in the year, that returned to growth in the fourth quarter and rose 3.3 per cent year-on-year.
Growth is being propelled by the web and emerging markets. Indeed, emerging markets now generates 22 per cent of global sales as China, India and Eastern Europe all saw fourth-quarter growth above 70 per cent. Meanwhile, fourth-quarter web sales in the MDD Americas business rocketed 28.9 per cent, while eCommerce in Europe and Asia-Pacific now generate 58.8 per cent and 50.9 per cent of total sales, respectively. Last June's launch of an online community for design engineers, called element14 and complemented by a US internet store, has made headway, too. The group's electronic design engineering sales proved to be more resilient than the maintenance repair and operations division's sales and are recovering faster as well. Meanwhile, a strong cash performance helped cut the debt pile.
Broker KBC Peel Hunt expects adjusted pre-tax profit of £64.2m for 2010-11, giving EPS of 12.1p (2009-10: £54.8m/10.7p).
Premier Farnell (PFL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 214p | MARKET VALUE: | £782m | |
| TOUCH: | 213-214p | 12-MONTH HIGH: | 214p | LOW: 115p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | * | NET DEBT: | £205m | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 774 | 36.0 | 8.60 | 9.0 |
| 2007 | 823 | 61.5 | 14.4 | 9.0 |
| 2008 | 745 | 71.2 | 13.7 | 9.2 |
| 2009 | 804 | 72.8 | 14.3 | 9.4 |
| 2010 | 795 | 53.5 | 10.4 | 9.4 |
| % change | -1 | -27 | -27 | - |
Ex-div: 26 May Payment: 23 Jun *Negative equity shareholders' funds | ||||
