Our readership may be too canny to let sterling's devaluation mask the underlying trading performance of UK exporters. A cursory glance at Electrocomponents ' (ECM) half-year figures shows a double-digit revenue increase, but around four-fifths of the improvement was attributable to currency translation effects and extra trading days through the period. Strip those out and the rise comes in at a more prosaic 2.1 per cent.
In reality, the steady operational strides made by the electronics components distributor are more apparent below the top line. Ongoing 'self-help' measures saw the gross margin expand by 30 basis points during the period, while losses in the Asia-Pacific and emerging markets division have narrowed appreciably. The upshot was that management felt able to raise its full-year cost-saving target by a fifth to £18m, giving way to £30m in annualised savings by March 2018, up £5m from the previous estimate.
Analysts at HSBC Global have upgraded their recommendation to 'buy', while raising the pre-tax forecast for the year to March 2018 by a quarter to £128m. This compares with £113m expected for FY2017, with EPS of 18.4p, up from £77m and 12.6p in FY2016.
| ELECTROCOMPONENTS (ECM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 387p | MARKET VALUE: | £1.71bn | |
| TOUCH: | 387p-388p | 12-MONTH HIGH: | 390p | LOW: 201p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 36 | |
| NET ASSET VALUE: | 74p* | NET DEBT: | 43% | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 627 | 19.9 | 3.1 | 5.0 |
| 2016 | 706 | 54.5 | 9.0 | 5.0 |
| % change | +13 | +174 | +190 | - |
Ex-div: 1 Dec Payment: 11 Jan *Includes intangible assets of £255m, or 58p a share | ||||
