14th Nov 2014 08:23
LONDON (Alliance News) - Premier Farnell PLC Friday said it saw sales per day rise in the third quarter of its financial year, but said its gross margin declined slightly on the back of weakness in Asia and Europe, and it now expects its full year operating margin to be lower than last year.
The technology-products distributor said group sales per day grew 2.7% in the quarter ended November 2 at constant exchange rates, and 3.1% excluding sales of Raspberry Pi. The Raspberry Pi is a credit-card-sized single-board computer developed in the UK.
However, it said its gross margin declined by 0.5 percentage points during the quarter, hit by softer market conditions in Asia and Europe as well as the mix of business. It said the UK market is also facing tougher competition.
"Whilst we expect gross margin to increase in the fourth quarter, we now anticipate that the impact of a softer trading environment and lower gross margin for the year will result in full year operating margin slightly below prior year levels," said Group Chief Executive Officer Laurence Bain in a statement.
Premier Farnell shares were down 7.7% Friday morning at 166.19 pence.
In Europe the company saw sales growth of 1.6%, excluding sales of Raspberry Pi, despite what it said was a more challenging market throughout Europe in September and October.
Asia Pacific sales growth remains strong but moderated in the third quarter with sales per day up 13.1%.
In the Americas' sales per day grew 3.9% year-on-year, buoyed by investments in Americas' product range.
"With the launch of further online enhancements over the coming months, we are confident that our Americas business has the foundation to attract and retain profitable engineering and manufacturing customers and deliver improved medium term financial performance," the company said.
Sales at the company's CPC and MCM businesses were up 9.2% year-on-year, and 5.6% excluding sales of Raspberry Pi.
Its industrial products division Akron Brass saw sales decline 5.8%, which it said was down to "exceptionally strong comparatives" as a result of a major contract win last year.
" The current year has seen a delay in a number of larger international projects which means that, adjusted for currency, we now expect Akron Brass' full year sales and operating profit to be broadly consistent with the prior year," it said.
The group said that following the completion of its strategic investments over the remainder of the year, and the reorganisation of its element14 business, it is "well positioned" going forward.
"The group will be well positioned to accelerate its top-line growth and deliver profitability in line with our targeted operating margin range of 10% to 12% through-the-cycle," said Bain.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
PFL.L