2nd Oct 2014 06:46
LONDON (Alliance News) - Electrocomponents PLC Thursday said underlying sales in the first half rose year-on-year, but said it expects its profits to be impacted by fewer trading days, the strength of sterling and restructuring costs.
The electronic and maintenance product distributor said group underlying sales in the first half to September 30 were up 3% overall. International sales have increased 5% in the period, but UK sales are down 2%.
The company said the year-on-year decline in its gross margin in the first half is expected to be in line with the 0.8 percentage point decline seen in the first quarter, primarily due to faster sales growth in its lower-margin North American business, the impact of the product mix, and increased discounting in its UK and Asia-Pacific arms.
The company said its operating profit in the first half is expected to take a hit of around GBP4 million from fewer trading days and sterling strength in the period. In addition, it will take a further GBP2 million hit from the restructuring of its sales teams in Asia-Pacific and the UK.
"Whilst mindful of the more challenging economic environment across Europe, we are progressing with the actions to improve sales in these markets in the second half," said Electrocomponents Chief Executive Ian Mason.
"During the second half we will be continuing the planned investment in the strategy and are confident that it will enable us to grow our market share and improve our financial performance over the medium term," Mason added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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