Overses sales drive Electrocomponents' growth

All international markets delivered double-digit percentage growth in the first half of the financial year of electronic components distributor Electrocomponents, putting the performance of the UK market in the shade.

The company saw a 17.5% rise in pre-tax profits for the half year period to 30 September to £59.4m, compared to £50.5m in the first half of the previous year, on the back of strong underlying sales growth of 11% year-on-year.

Most of that growth came from overseas, where underlying sales growth of 14% comfortably outstripped the UK's 5% growth. The trend continued into the second half, where the UK's 2% year-on-year growth in October was one-third of the level of growth seen overseas. Sales for the group as a whole in October were up 5% on a year ago.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

In the six months to the end of September, the firm generated £626.5m in revenue, versus £563.3m the year before. The return on sales increased from 9.5% in the first half of the previous financial year to 9.9% this time round.

The electronics division saw 12% sales growth and maintenance saw 11%, while eCommerce revenue rose 26%.

Second half operating costs are expected to be in line with the second half of the last financial year.

Chief executive Ian Mason said: "I am pleased to report a strong first half performance with all our regions contributing to the group's sales growth of 11%, building on the excellent progress we made last year.

"As the leading global high service distributor operating in large, growing and highly fragmented markets, we have continued to take share, particularly from smaller competitors, and our strategy is delivering good results."

The board will pay an interim dividend of 5p per share, equal to that paid last year.

Cash at the end of the period was slightly lower compared to the same period a year ago, down from £10.4m to £8.6m.

The share price 1.34% to 211.2p by 09:18.

NR