17th Dec 2015 08:11
LONDON (Alliance News) - Premier Farnell PLC on Thursday said its operating profit for its current financial year to February 1, 2016, will be in line with previous guidance but towards the lower end of that range.
The formerly FTSE 250-listed technology products distributor had previously guided for adjusted operating profit to be between GBP73 million and GBP77 million for the year.
For its third quarter from August 3 to November 1, the company reported a 0.5% rise in group sales, as a strong performance in Asia Pacific offset declines in Europe and the Americas.
Premier Farnell said it is focused on undertaking initiatives to restore growth in profitability in its financial year 2017, although it remains cautious about the ongoing challenging industrial backdrop in the US.
In July, the company also began an operational review, focused on its global electronics distribution business element14. It said it has identified cost savings of GBP19 million on an annualised basis, and it expects to achieve the full run-rate benefit in the financial year 2018. This will result in one-off costs of GBP10 million, which will be largely incurred in the financial year 2017, it said.
Premier Farnell said that it has had "considerable interest" in its Akron Brass business, and it expects to be able to complete a sale of the business in the first quarter of calendar 2016.
"Our results in the quarter are a reflection of the challenging conditions in the UK and US. However we are encouraged by the strong growth we continue to see in the APAC region," said Interim Chief Executive Officer Mark Whiteling in a statement.
"The outcome of the operational review, announced today, has identified a number of efficiency and margin improvement initiatives which will position the group to deal with the margin pressures that it has experienced in recent times. The board is confident that the combination of these initiatives will provide the platform for future growth," Whiteling added.
The company's search for a new permanent chief executive officer is ongoing, it said.
Shares in Premier Farnell were up 4.1% at 95.00 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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