8th Oct 2020 10:03
(Alliance News) - Electrocomponents PLC on Tuesday said it expects to report an overall decline in revenue for the first half of financial 2021, despite an improved second quarter performance.
For the six months to the end of September, the distributor of industrial and electronic products expects to report a 7% drop in like-for-like revenue, with weaker performance posted from all regions.
For the first quarter to the end of June, revenue on a like-for-like basis fell by 11%, but this improved in the second quarter to a 4% decline.
Geographically, the FTSE 250-listed firm reported an 8% revenue drop from Europe, the Middle East & Africa and the Americas. Revenue from the Asia-Pacific only declined by 2% in the first half.
Looking ahead, Electrocomponents expects Covid-19 issues that have affected profitability in the first half to ease in the second half. The factors stemming from the pandemic had led to higher costs from outbound freight charges and some labour inefficiencies in the first half.
The company noted that its consensus expectations for adjusted pretax profit for the year ending March 31, 2021, is between GBP150.9 million and GBP175.4 million, reflecting an 18% to 29% drop from GBP215.0 million the year before.
"I am very encouraged by the strength and resilience the group has shown through Covid-19 with trading performance and market share continuing to improve. We maintain a strong balance sheet and are accelerating key strategic initiatives to drive scale and efficiency through the business. While we remain cautious with respect to the ongoing Covid-19 situation, I am confident in the group's prospects and we are well placed to take advantage of the significant growth opportunities we see," said Chief Executive Officer Lindsley Ruth.
Electrocomponents will publish its interim results on November 10.
Shares in Electrocomponents were up 3.5% at 749.0 pence each on Thursday morning in London.
By Dayo Laniyan; [email protected]
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