20th Mar 2014 09:30
LONDON (Alliance News) - Premier Farnell PLC Thursday announced that it will acquire US engineering design services company AVID Technologies Inc for USD13 million, as it reported a rise in pretax profit in 2013.
Premier Farnell produces technology for industrial markets including robotics, oil and gas, and utilities.
The company maintained its total dividend at 10.4 pence per share. It posted a pretax profit of GBP74.8 million in 2013, up from a restated GBP69.0 million in 2012, as revenue rose to GBP968.0 million from GBP952.0 million. The previous year's results were restated to reflect the impact of international accounting standard 19 on its post-retirement expenses and liabilities and covered 53 weeks, rather than 52.
In its Market and Distribution Division revenue rose to GBP892.7 million from GBP883.6 million. Sales of Raspberry Pi rose to GBP31.7 million from GBP16.9 million in 2012.
In the second half of the year the company implemented a reseller model for sales in its main Market and Distribution Business, which helped improve efficiency and caused gross margin to decline by 0.4 percentage point.
The Raspberry Pi is a credit-card-sized single-board computer developed in the UK.
Premier Farnell said it had made progress against its strategy to develop its core customer proposition during 2013, including investing in its inventory to add product lines. It decommissioned optical character recognition technology, as the cost of maintaining its infrastructure no longer justified its benefits as it had become less favoured by customers.
The company said its acquisition of AVID is part of its investment in developing its technology capability at the front end of the design cycle and extending its business model. "This acquisition illustrates perfectly how we are evolving our global strategy to establish partnerships with customers at the earliest stage of their designs," said Chief Executive Laurence Bain in a statement.
The company plans to build on its investment in 2014 through AVID and Shenzen Embest Technology Co Ltd, which it acquired in 2012. It will also launch a Development Tool Superstore for customers designing new products, and enhance its eCommerce capabilities by rolling out an upgraded online platform across Europe and the Asia Pacific.
Premier Farnell said the new financial year had started positively, despite adverse weather conditions in North America hitting its performance in February.
The company said that its planned investment in its strategy will lead to its operating margin in 2014 remaining broadly similar to 2013, and after that it will be better positioned to deliver a performance in line with its key performance indicators.
Shares in Premier Farnell were trading up 2.8% at 226.10 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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