Electrocomponents (ECM) revealed a disappointing half-year performance, as weak US manufacturing and increased UK operating costs depressed earnings. As a result, management has outlined plans to overhaul the global engineering distributor.
"This company has a great past of setting targets and then missing them," says chief executive Lyndsley Ruth. So, instead of numerical targets, management has set out strategic goals, including plans to scale-back operations in the Asia Pacific region, together with skewing the sales mix in favour of the higher-margin RS Private Label business. Mr Ruth decided to halt the design of a new website in order to reallocate resources to improve its existing one. As a result, the group incurred an £11.4m non-cash charge, further eroding profit.