Electrocomponents growth limited by electronic sales but H2 looking up

Electronics and maintenance products distributor Electrocomponents has said it expects to deliver a strong second half to the year, after underlying sales growth in the four months to January 31st was around one per cent.

Electronics and maintenance products distributor Electrocomponents has said it expects to deliver a strong second half to the year, after underlying sales growth in the four months to January 31st was around one per cent.

Maintenance sales saw growth of about 2.0%, but electronic sales declined around 1.0%. The international division saw an improvement to sales trends, with group sales growing in both December and January.

The company increased its spend on search engine marketing said its recently-enhanced web checkout contributed to group eCommerce sales growth improving to around 5.0%, giving group eCommerce sales share in the period of around 57%.

Ian Mason, Group Chief Executive, said: "Whilst the macroeconomic environment is likely to remain difficult throughout the remainder of the second half, we continue to expect that our initiatives to drive sales growth and actions to improve operating margins will result in a stronger second half of the year."

The company added: "Group gross margin is responding positively to our actions to improve discount effectiveness and implement a targeted price differentiation strategy. These actions are offsetting the impact of a stronger performance from lower-margin technologies, including Raspberry Pi, and adverse currency movements. We expect that the second-half gross margin will be higher than the first half, albeit below the corresponding prior-year level.

"The implementation of our new global organisation structure is now complete and the associated efficiencies are expected to deliver cost savings of more than £3.0m in the second half. Combined with other cost actions, we continue to expect that second-half headline operating costs as a percentage of sales will be lower than the first-half level."

The second-half reorganisation costs relating to the implementation of the global organisation structure are expected to be towards the lower end of the range of £4.0m to £6.0m given in the half-yearly financial report (H1 FY13 reorganisation costs: £2.5m).

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