Distributor Electrocomponents flagged the key elements of these half-year results in last month's trading update, so reaction to the figures was muted. Underlying revenue growth slowed to 11 per cent - a weaker performance in the UK partially offsetting strength overseas – and to 5 per cent in September. But there was no further deterioration last month and the domestic market managed 2 per cent revenue growth in October following a 1 per cent decline the month before.
A chunky 72 per cent of sales still come from international markets. Indeed, Asia Pacific sales rose 12 per cent in the period and were within a percentage point of maintaining that in October. But that's the smallest of its regions; in the more important continental European unit sales growth slowed from 15 per cent to 5 per cent, while North America's declined from 14 per cent to the same level. Electrocomponents, however, is targeting costs - after rising 9 per cent during the period, operating costs should be flat in the second half. Growth in e-commerce should help. Sales there rose 26 per cent, taking its share of group revenue to 54 per cent.
Broker Peel Hunt forecasts adjusted pre-tax profit of £117.6m for the full year, giving adjusted EPS of 18.6p (2011: £114m/18p).
ELECTROCOMPONENTS (ECM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 212p | MARKET VALUE: | £926m | |
| TOUCH: | 211-212p | 12-MONTH HIGH: | 298p | Low: 171p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 80p* | NET DEBT: | 48% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 563 | 50.5 | 8.0 | 5.0 |
| 2011 | 627 | 59.4 | 9.4 | 5.0 |
| % change | +11 | +18 | +18 | - |
Ex-div: 7 Dec Payment: 13 Jan *Includes intangible assets of £208m, or 48p per share | ||||
