17th Mar 2016 08:07
LONDON (Alliance News) - Technology products distributor Premier Farnell PLC on Thursday said its pretax profit sank in its recently-ended financial year due to a margin squeeze caused by a strong dollar, pricing pressure and a less-favourable sales mix.
The company said its pretax profit for the year to the end of January was GBP29.2 million, compared to GBP54.1 million a year earlier, even though revenue increased to GBP982.7 million from GBP960.1 million.
The profit line took a hit from the group's gross margin declining to 34.4% from 36.8%. The group also booked costs related to the sale of its Akron Brass business, which it offloaded in March 2015 for USD224.2 million.
Sales per day growth for the group slowed in 2015, down to 1.6% from 3.3% a year earlier.
Premier Farnell said it will pay a final dividend of 3.6 pence per share, down 40% year-on-year, meaning its total dividend will fall by the same amount, down to 6.2p, in line with a previously announced rebasing of its dividend payouts.
Mark Whiteling, interim chief executive of Premier Farnell, said the group continued to face tough trading conditions in North America and the UK in 2015, but said it is better positioned following a restructuring of its operations to grow in 2016.
Still, Premier Farnell said it does not expect the competitive pressures it faces to ease soon and will continue to seek to stabilise its gross margin and cut operating costs in the current financial year.
Shares in Premier Farnell were down 4.1% to 116.50p in early trade, the worst performer in the FTSE All-Share just after the open.
By Sam Unsted; [email protected]; @SamUAtAlliance
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