23rd Jul 2015 06:55
LONDON (Alliance News) - Electrocomponents PLC Thursday said sales grew in the first quarter of the new financial year but said it needs to reinvigorate growth in the UK and Asia Pacific and "arrest" the decline in its gross margin.
The FTSE 250-listed electronics distributor said sales, adjusted for trading days and currency movements, increased 5% in the first quarter of the financial year from a year earlier.
Sales revenue in the UK fell 1% year-on-year, whilst sales in continental Europe rose 13% and in North America by 3%. Asia Pacific sales remained flat. Electrocomponents said that overall, "July has started more slowly".
"In the first quarter, group underlying sales growth rose to 5%. Europe is performing well with good double-digit growth, and in North America we have seen slower growth against a market backdrop of weakening US manufacturing output," said Chief Executive Lindsley Ruth.
"There is still much to do to reinvigorate growth in the UK and Asia Pacific and to arrest the decline in gross margin," she added.
The company said its gross margin in the first quarter was 1.7 points below the same period a year earlier due to the negative impact of foreign exchange, price and discounting impacts and as a result of its lower margin products growing faster than its other products.
eCommerce sales "accelerated" in the quarter, growing 10% in the period. Electrocomponents said eCommerce sales now make up 60% of the company's total revenue. In the last financial year, eCommerce sales made up 59% of total revenue.
By Joshua Warner; [email protected]; @JoshAlliance
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