Electrocomponents (ECM) noted a "cyclical return in demand" for electric components when it published full-year figures in May. Six months on and the global distributor cautioned that “trading comparatives will toughen” as the year progresses. This partly alludes to probable foreign-exchange effects, but shareholders will note the 13.3 per cent rise in underlying revenue at the half-year mark, together with a near one-third increase in underlying pre-tax profit.
There was progress across the board, as all five regions registered double-digit revenue growth and market share gains. The gross margin ticked up 60 basis points and the group is “on track to deliver stable gross margins in the full year”. Expected cumulative annualised cost savings of £30m should help on that front.
Working capital as a percentage of sales increased slightly, and headline-free cash flow pulled back sharply, as a result of inventory build through the period. Conversely, net debt contracted and now stands at a lowly 0.7 times cash profits.
Numis gives adjusted pre-tax profit of £163m and EPS of 26.4p for the year ending March 2018, from £128m and 20.9p in 2017.
| ELECTROCOMPONENTS (ECM) | ||||
| ORD PRICE: | 681p | MARKET VALUE: | £3.01bn | |
| TOUCH: | 680-682p | 12-MONTH HIGH: | 712p | LOW: 365p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 90p* | NET DEBT: | 31% | |
| Half-year to | Turnover | Pre-tax | Earnings per | Dividend |
| 30 Sep | (£m) | profit (£m) | share (p) | per share (p) |
| 2016 | 706 | 54.5 | 9.0 | 5.00 |
| 2017 | 824 | 75.7 | 12.4 | 5.25 |
| % change | +17 | +39 | +38 | +5 |
| Ex-div: | 30 Nov | |||
| Payment: | 10 Jan | |||
| *Includes intangible assets of £244m, or 55p a share. | ||||
