Last year was hard for electronic components distributor Premier Farnell (PFL) and underlying pre-tax profit fell 15 per cent to £75.7m. Still, all but one of its businesses did better in the fourth quarter than in the third and the current financial year has started well. Even the underperforming US division is growing again.
Falling sales and deteriorating margins in the UK and Europe easily cancelled out strength in Asia, but America took the wooden spoon. Despite improving economic growth indicators, profit there plunged by a fifth to £25.2m and a spending hiatus during fiscal cliff negotiations caused a 34 per cent slump in US government business in the fourth quarter. However, sales per day have risen every month since November and parachuting in a top manager to fix the contact centre there can only help.
Sales grew sequentially in the UK, too, up 2.6 per cent in the fourth quarter. Mainland Europe managed 5.9 per cent growth in the three month period and China and India double-digits. And Premier’s industrial products division made a valuable contribution with annual profit up 18 per cent, as did its small business and consumer focused unit which chipped in an extra £1.3m of profit in 2013. Management has also found an extra £2.4m of savings which should shore up margins.
Broker Peel Hunt expects an increase in adjusted pre-tax profit to £77.2m this year, giving adjusted EPS of 15.1p (£75.7m and 14.8p in 2013).
PREMIER FARNELL(PFL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 224p | MARKET VALUE: | £829.7m | |
| TOUCH: | 223-224p | 12-MONTH HIGH: | 238p | LOW: 150p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 16 | |
| NET ASSET VALUE | 18p* | NET DEBT: | 339% | |
| Year to 3 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 804 | 72.8 | 14.3 | 9.4 |
| 2010 | 795 | 53.5 | 10.4 | 9.4 |
| 2011 | 991 | 93.3 | 18.3 | 10.4 |
| 2012 | 973 | 104.6 | 21.2 | 10.4 |
| 2013 | 952 | 70.6 | 13.6 | 10.4 |
| % change | -2 | -33 | -36 | - |
Ex-div: 29 May Payment: 18 Jun *Includes intangible assets of £68.9m, or 19p per share | ||||
