21st May 2015 06:56
LONDON (Alliance News) - Electrocomponents PLC Thursday announced that Finance Director Simon Boddie will be stepping down at the end of the first half of its current financial year, as it posted a decline in pretax profit for its recently ended financial year due to continued declines in the UK.
Boddie will stay with the business until the end of September to allow for a smooth transition, and for the company to secure a successor.
The electronics company said that its performance had been "disappointing", with investments not yet delivering an expected step-up in revenue growth and with its UK business remaining in decline.
Electrocomponents posted a pretax profit of GBP96.1 million for the year to end-March, down from GBP101.1 million a year before, as revenue declined to GBP1.266 billion from GBP1.27 billion, and a non-cash credit of GBP20.4 million from changes it made to its pension scheme was partly offset by reorganisation costs of GBP4.4 million, as it restructured its sales teams in Asia Pacific and the UK and closed some warehouses.
Although the company saw revenue growth of 6% in its international divisions, this was more than offset by a 2% decline in UK revenue. Gross margin fell 1.3% points to 44.6%, as growth was faster in lower-margin geographies, it increased discounting to drive sales in the UK and Asia, and it was hit by the weakening of the euro and strengthening of the dollar.
Electrocomponents said the UK market remains difficult, and following a review of its performance it made changes to its sales management early in the year and formulated an improvement plan.
Newly appointed Chief Executive Lindsley Ruth, who joined the company in April, will lay out plans for delivering a "sustained improvement in performance" in November.
"2015 financial performance was not good enough and something we are determined to improve. We are pleased to welcome Lindsley Ruth as our new Group Chief Executive and the Board will support him as he assesses what changes are needed to the strategy and its implementation in order to deliver a much improved performance going forward," said Chairman Peter Johnson in a statement.
Electrocomponents maintained its final dividend at 6.75 pence per share, and its total dividend at 11.75 pence.
Electrocomponents said that in the first seven weeks of its new financial year it has delivered sales growth of 4%, with 6% growth in its international business offsetting a 2% decline in the UK.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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