Final Results

Premier Farnell plc 19 March 2015 Results for the financial year ending 1 February 2015 Key Financials FY 14/15 FY 13/14 Change Underlying£m except for per share (52 weeks) (52 weeks) Growth (a) Total revenue 960.1 968.0 -0.8% 3.3%Adjusted operating profit (b) 88.0 93.0 -5.4% -0.1%Adjusting items (b) (4.9) (1.5)Total operating profit 83.1 91.5 -9.2% -4.0%Adjusted profit before tax (b) 74.0 76.3 -3.0%Total profit before taxation 69.1 74.8 -7.6%Adjusted earnings per share (b) 13.8p 14.3p -3.5%Basic earnings per share 12.9p 14.0p -7.9%Free cash flow (c) 35.2 36.1 -2.5%Ordinary dividend per share 10.4p 10.4p (a) Sales per day growth for continuing businesses and operatingprofit growth at constant exchange rates, unless otherwise stated. (b) 2014/15 and 2013/14 adjusting items are outlined in the financialreview. (c) Free cash flow comprises total cash generated from operations,excluding cash flows related to adjusting items, less net capital expenditure,interest, preference dividends and tax payments. FINANCIAL PERFORMANCE - Underlying sales growth of 3.3% year on year - Adjusted operating profit of £88.0m flat at constant currency - Operating margin at 9.2% down 40bps - Gross profit up 1.4% at constant currency - SG&A as a % of sales down 40bps at constant currency - Adjusted profit before tax of £74.0m down 3.0% - Adjusted free cash flow at 3.7% of sales reflecting inventory investments - Board recommends an unchanged full year dividend of 10.4p per share GLOBAL EFFICIENCY PROGRAMMES - Proposed global organisational structure to deliver £10m-£12m annualisedcost saving - New web platform fully implemented globally to enable growth of the eCommerce channel CUSTOMER FOCUSED STRATEGY - Progress to enhance proposition for three target customer segments: - Engineering customers: development kit sales up over 20% year on year - Manufacturing customers: investments completed to build small production proposition - Component manufacturers: over 90 projects for 20 semiconductor manufacturers completed Laurence Bain, Chief Executive Officer,commented: "The past financial year has been a challenging period for PremierFarnell as we position ourselves for future profitable growth. The investments we have made to date will enable us to execute ourstrategic growth initiatives. By improving our growth trajectory, reducingcosts and completing the transformation of element14, we believe that PremierFarnell is well positioned to deliver improved financial performance. We havemade a satisfactory start to the year and our expectations for the currentfinancial year remain unchanged." For further information, contact: Laurence Bain, Chief Executive Officer Premier Farnell plc +44 (0) 20 7851 4107Mark Whiteling, Chief Financial OfficerThomas Churchill, Investor Relations Richard Mountain FTI Consulting +44 (0) 20 3727 1374 Premier Farnell's announcements and presentationsare published at www.premierfarnell.com together with business information andlinks to all other Group web sites. An interim management statement will beannounced on 18 June 2015. This press release contains certain forward-lookingstatements relating to the business of the Group and certain of its plans andobjectives, including, but not limited to, future capital expenditures, futureordinary expenditures and future actions to be taken by the Group inconnection with such capital and ordinary expenditures, the expected benefitsand future actions to be taken by the Group in respect of certain sales andmarketing initiatives, operating efficiencies and economies of scale. By theirnature forward-looking statements involve risk and uncertainty because theyrelate to events and depend on circumstances that will occur in the future.Actual expenditures made and actions taken may differ materially from theGroup's expectations contained in the forward-looking statements as a resultof various factors, many of which are beyond the control of the Group. Thesefactors include, but are not limited to, the implementation of initiativessupporting the Group's strategy, the effect of legislation and regulatoryenactments, recruitment and integration of new personnel, the implementationof cost saving initiatives, continued use and acceptance of e-commerceprograms and systems, implementation of new IT systems, the ability to expandinto new markets and territories, the implementation of new sales andmarketing initiatives, changes in demand for electronic, electrical,electromagnetic and industrial products, rapid changes in distribution ofproducts and customer expectations, the ability to introduce and customers'acceptance of new services, products and product lines, product availability,the impact of competitive pricing, fluctuations in foreign currencies, andchanges in interest rates and overall market conditions, particularly theimpact of changes in worldwide and national economies. The Group does notintend to update the forward-looking statements made herein. Divisional Analysis Revenue H2 14/15 H2 13/14 Underlying FY 14/15 FY 13/14 Underlying £m £m growth(a) £m £m growth(a)MDD Division Europe 173.8 175.8 2.8% 357.1 363.8 1.9% APAC 40.1 35.1 13.6% 79.3 72.1 16.1%Europe & APAC 213.9 210.9 4.6% 436.4 435.9 4.2% Americas 168.8 165.6 1.3% 333.1 347.1 1.1% MDD Other 60.5 55.2 9.1% 117.1 109.7 7.9%Total MDD 443.2 431.7 3.9% 886.6 892.7 3.5% IPD 37.6 38.1 -3.8% 73.5 75.3 1.3% Group 480.8 469.8 3.3% 960.1 968.0 3.3% Adjusted Operating Profit (Operating margin %) H2 14/15 H2 13/14 Underlying FY 14/15 FY 13/14 Underlying £m £m growth(a) £m £m growth(a)MDD Division Europe & APAC 26.4 28.9 -2.2% 57.2 60.3 0.7% 12.3% 13.7% 13.1% 13.8% Americas 9.6 9.2 2.1% 19.5 19.7 4.3% 5.7% 5.6% 5.9% 5.7% MDD Other 6.1 6.6 -7.6% 11.7 12.1 -3.3% 10.1% 12.0% 10.0% 11.0%Total MDD 42.1 44.7 -2.1% 88.4 92.1 0.9% 9.5% 10.4% 10.0% 10.3%IPD 6.9 7.0 -4.2% 13.7 14.0 1.5% 18.4% 18.4% 18.6% 18.6%Head office (6.5) (6.2) (14.1) (13.1) Group 42.5 45.5 -3.4% 88.0 93.0 -0.1% 8.8% 9.7% 9.2% 9.6% Note: The revenues and operating profits in both the analysis above and thesegment information in note 2 of this statement are, where appropriate,translated to sterling based on the prevailing exchange rates at the time ofthe underlying transactions. In order to provide a like for like comparison,the underlying growth stated above is on a constant currency basis, consistentwith the way that performance is measured by the business. Current yearadjusted operating profit excludes restructuring costs of £5.1m (MDD Europeand APAC £1.1m, MDD Americas £0.2m, Head office £3.8m), net gain on USproperty of £0.3m related to savings on expenses incurred in the prior yearrelocation of the MDD Americas Head Office (MDD Americas) and acquisitioncosts of £0.1m (MDD Americas). PREMIER FARNELL OVERVIEW Premier Farnell plc is a global, high service technology company,predominantly engaged in the marketing and distribution of products andservices in the time-critical and innovation-focused electronic componentsdistribution sector. With over 4,500 employees, operating in 36 countries, theGroup is comprised of three distinct business units that focus on specificmarket segments. The element14 and CPC & MCM businesses together comprise ourMarketing and Distribution Division (MDD). Akron Brass is our IndustrialProducts Division (IPD). 2014/15 BUSINESS REVIEW Full year Group sales grew 3.3% year on year, reflecting theexecution of our strategic growth initiatives and market conditions. The salesperformance of each of our divisions is set out in the table below with growthrates excluding Raspberry Pi provided to aid understanding of the underlyinggrowth rates. Sales growth (including Raspberry Pi) (excluding Raspberry Pi) Q4 H2 FY Q4 H2 FYelement14 (MDD) Europe 4.6% 2.8% 1.9% 6.1% 3.8% 2.5% APAC 13.6% 13.6% 16.1% 13.5% 13.2% 15.2% Americas 0.8% 1.3% 1.1% 2.1% 3.0% 2.6% 3.8% 3.1% 2.8% 5.0% 4.3% 3.7%CPC & MCM (MDD) 9.0% 9.1% 7.9% 4.4% 5.0% 3.8%Akron Brass (IPD) -1.9% -3.8% 1.3% -1.9% -3.8% 1.3%Group 4.0% 3.3% 3.3% 4.4% 3.7% 3.5% Against a mixed economic backdrop, Europe delivered full year salesgrowth of 1.9% year on year. Excluding Raspberry Pi, Europe sales increased2.5% year on year. Market conditions in the United Kingdom remain challenging,despite some encouraging manufacturing PMIs, with our business reporting ayear on year sales decline of 3.4% in the second half. Continental Europecontinued to perform more strongly, growing sales 5.6% year on year in thesecond half led by Germany, Italy, Spain, Scandinavia and Eastern Europe. Asia Pacific continues to provide the Group with long-term growthopportunities. We have continued to grow market share in the region, with fullyear sales up 16.1% over the prior year. Every market in the region deliveredpositive growth throughout the year with sales growth in the key emergingmarkets of China and India at 18.1% and 20.3%, respectively, whilst Australiadelivered sales growth of 5.6% over the prior year. Americas' element14 business delivered full year sales growth of1.1% year on year as we began to implement plans to transform the region'sperformance and integrated AVID Technologies into the Group. Excluding AvidTechnologies, Americas' full year sales were flat year on year. We anticipatethat the Americas will benefit from our proposed global organisationalstructure as this will enable us to better leverage our global resources toenhance the customer proposition and sales effectiveness. CPC and MCM delivered combined full year sales growth of 7.9% in2014/15, despite a challenging market backdrop, benefitting from sales of theRaspberry Pi. This follows the transfer of Raspberry Pi business fromelement14 to CPC and MCM in the first half of the year, as well as the launchof the CPC catalogue at the end of the first quarter. Raspberry Pi full year sales declined 2.3% year on year as thedemand for the earlier versions of the board moderated, reflecting a typicaltechnology product lifecycle. Having invested in stock ahead of its release on2 February 2015, we have seen good demand for the latest iteration of theRaspberry Pi from both CPC and MCM customers in the UK and North America aswell as element14 customers in Continental Europe and Asia Pacific. Following a standout year in 2013/14, Akron Brass performed in linewith our expectations with full year sales up 1.3% year on year. Thecomparators from last year's contract win with the Hindustan Petroleum CompanyLimited were especially strong in the second half and Akron Brass salesdeclined 3.8% year on year in the period. The business is well positioned tocontinue its expansion into international markets and build on its marketleading position in North America. 2014/15 STRATEGIC REVIEW Our 2014/15 performance in comparison to ourtargets reflects our journey to transform Premier Farnell, with investmentsmade that will enable us to deliver improving future financial performance. Aswe execute our strategic priorities and continue our journey to build ourstrategic vision of becoming the global destination for electronics customers,we will create sustainable shareholder value by growing our business,delivering efficiencies, optimising profitability and delivering free cashflow. Objective Strategic priority KPI Growth Become the recognised technology experts for design services and manufacturing 6% sales growth of development kits for global components manufacturers 4% active customer growth Build and leverage technical expertise to attract engineering customers at 10% emerging markets cutting edge of technology growth Grow our business with engineering and manufacturing customer base, especially in the emerging markets Efficiency Evolve our operating model into a more efficient and effective global, >30% RONA function based structure Develop attractive eCommerce channels that enable automation of processes 70% of MDD sales from eCommerce Profitability Optimise our business through effective management of gross margin and costs 10%-12% ROS% Cash Optimise use of cash in the business and distribution of funds to shareholders 6% FCF to sales through-the-cycle Our actions through our 2014/15 financial year in relation to each of thesestrategic priorities are described below. Strategic objective 1: Growth Become the recognised technology experts for design services and manufacturingof development kits for global components manufacturers. 2014/15 was an important year in developing our design and manufacturingservices to the global components manufacturers. Through the successfulacquisition and integration of AVID Technologies, element14 is now able tooffer expertise from over 200 engineers across a broad range of technologies.Component manufacturers have responded positively to our enhanced offering.Embest and AVID have completed a total of 90 projects for more than 20semiconductor manufacturers this year and we have an encouraging pipeline ofopportunity into the year ahead. Build and leverage technical expertise to attract engineering customers at thecutting edge of technology. Following last year's inventory investment to enhance our range of developmentkits, we have delivered sales growth of over 20% year on year in thisstrategically important product group. The element14 community, which provides engineers with an online hub todiscuss new technologies, now has over 300,000 members globally and receivedover 7.4m unique visits this year. During the year, we launched phase one ofour new online Design Center. Engineers are increasingly using software as thekey point of differentiation in their products. We anticipate launching phasetwo of the Design Center in the first half which will incorporate a softwarestore where customers can buy licences for embedded systems development toolsfrom brands such as ARM, Timesys, Atollic as well as our exclusive onlinerelationship with Altium's Circuit Studio and our own CadSoft EAGLEcomputer-aided design software. Grow our business with our engineering and manufacturing customer base,especially in the emerging markets. Over the past two years, we have made incremental inventory investmentstotalling £35m principally to enhance our product range for both thesecustomer segments, as part of establishing an overall production productproposition. In addition, we have been building the capability in ourdistribution centres to meet additional small volume production requirementswith date and lot code traceability on over 300,000 products. Through therollout of the new global web platform we have enhanced our primarygo-to-market channel. We are now implementing further online enhancements forsmall volume production customers and upgrades to our mobile web experience. Group sales growth of 3.3% was short of our 6% through-the-cycle sales growthtarget but was ahead of the 2.6% sales growth achieved in the prior year. Theactive customer base exited the year 2.1% lower compared to the prior year.Significant effort is being applied to return this metric to growth,particularly as we focus on acquiring customers online having completed therollout of the new web platform. Sales in emerging markets grew 13.1% year onyear, above our strategic target of 10% sales growth. Strategic objective 2: Efficiency Focus on cost control and improving the efficiency of our operating model areconstant priorities for our business. The effective management of our costprofile has enabled us to offset the majority of the gross margin decline,delivering SG&A as a percentage of sales at 27.6%, a reduction of 0.4percentage points at constant exchange rates. We continue to measure oursuccess in the optimisation of our global resources against a return on netoperating assets (RONA) target of >30%. In 2014/15, the Group's RONA wasslightly below this goal at 29.6%. Evolve our operating model into a more efficient and effective globalstructure. In June 2014, we reported that we had begun to move to an integrated, globalorganisational structure in our element14 marketing and distributionbusinesses. By moving to a function based structure, the business will betterleverage its expertise and resources around the globe. As well as betterenabling the execution of our strategy, the simplified global structure willdeliver operating efficiencies and economies of scale. Following a rigorous process that involved over 70 functional experts fromacross the business, we have now completed the proposed design of the newglobal organisation. This rigorous design process enabled us to identifyefficiency savings beyond those initially anticipated. We are now targetingtotal annual cost benefits of £10m to £12m, once the new structure is fullyimplemented with approximately £3m to £4m of benefit in 2015/16 and a further£7m to £8m of benefit in 2016/17. Develop attractive eCommerce channels that enable automation of processes. We took a significant step in the development of our eCommerce channels thisyear by completing the roll out of our upgraded global web platform. Having asingle global web platform will allow the business to benefit from operatingefficiencies and enable sales and marketing activity to be implemented quicklyand consistently around the globe, as well as providing a better onlineexperience for our customers. eCommerce penetration was 49.3%, down 5.8 percentage points from the prioryear. This decline principally reflects the decommissioning of opticalcharacter recognition for the fully automated processing of faxes, which tookplace at the end of the prior year, as well as the evolving shape in ourcustomer base as we extend our model towards the small volume productionsales. While we have been investing in developing an online productionproposition, we have been supporting these customers through traditionalchannels. Web enhancements targeted at small volume production are scheduledto go live over the coming months. This will support the Group's drive towardsour objective of 70% sales via eCommerce. Strategic objective 3: Profitability Optimise our business through effective management of gross profitand costs. The Group targets an operating margin that optimises profitabilitythrough-the-cycle by seeking to maximise gross profit and managing costs bothstrategically, as we transform our business, and tactically in line withmarket conditions. Full year operating margin of 9.2% (adjusted) reflected adecline in gross margin, our planned strategic investments to enhance ourcustomer proposition as we transform our business and ongoing focus on costmanagement. A core objective of our strategy is that we will provide a customerproposition that delivers growth in sales and gross profits. We remain focusedon managing gross margin in line with market conditions but we also anticipatethat certain aspects of our strategy - namely the evolving customer andproduct mix - will result in further dilution to gross margin over time. Inline with this objective, we have realigned our pricing to reflect the currentcompetitive environment in an increasingly global marketplace and alsocontinued to grow faster in strategically important products such asdevelopment kits and semiconductors, as well as in higher volume business andestablishing our leadership in the embryonic single board computing space.Whilst this approach has led to a 0.7 percentage point decline in gross marginto 36.8%, we have delivered growth in gross profits, on a constant currencybasis, up 1.4% year on year. Focus on cost control enabled us to offset the majority of thegross margin decline. Adjusted operating profit reduced by 0.1% at constantcurrency compared to the prior year. Strategic objective 4: Cash Optimise use of cash in the business and distribution of funds toshareholders through-the-cycle. We aim to optimise the use of cash in the business to takeadvantage of the strategic opportunities that arise and to enable distributionof funds to shareholders through-the-cycle. Adjusted free cash flow as apercentage of sales of 3.7% was below our through-the-cycle target of 6%,following further inventory investments to enrich our product offering forengineering and manufacturing customers. With our ability to manage workingcapital in response to market conditions and our commitment to maintaining thequality of earnings through this period of investment, the Board hasrecommended an unchanged final dividend of 6.0p per share, resulting in a fullyear dividend of 10.4p (2013/14: 10.4p). 2014/15 FINANCIAL COMMENTARY Adjusted operating profit for the full year was £88.0m (2013/14:£93.0m), representing a decline of 0.1% year on year at constant exchangerates. Operating margin of 9.2% (adjusted) reflected a decline in gross marginand the planned strategic investments to enhance our customer propositioncompleted this year, offset partly by continued focus on managing coststightly. Adjusting items include £5.1m of restructuring costs related to ourglobal business re-organisation, of which £2.8m were recognised in the secondhalf. Total cost to achieve the business re-organisation is expected to beapproximately £10m with the remainder recognised in 2015/16. Prior yearadjusting items included restructuring costs of £3.9m, a net gain on USproperty disposal of £1.6m and a one-off £0.8m gain following re-measurementof the expected contingent consideration payable in respect of the Embestacquisition. Total operating profit was £83.1m for the full year, reflecting anet cost from adjusting items of £4.9m (2013/14: £91.5m, after reflecting anet cost from adjusting items of £1.5m), resulting in a year on year declineof 4.0% at constant exchange rates. Adjusted free cash flow as a percentage of sales of 3.7% for thefull year reflected inventory investments, now completed, to enrich ourproduct offering for engineering and manufacturing customers. Net cash outflowfrom investment in working capital was £15.1m, resulting in adjusted cashconversion at 97.5% (2013/14: 93.2%). During the year the Group purchased and cancelled 712,948 of itspreference shares at a total cash cost of £11.5m. Based on the book value andfair value of the instrument at the date of purchase, the financial liabilityelement of the preference shares was reduced by £11.5m and the equity elementby £1.9m. Total consideration payable for the acquisition of AVIDTechnologies was £7.7m, with additional acquisition costs of £0.1m shown as anadjusting item. Of the total consideration, £0.3m relates to the fair value ofnet assets acquired and £7.4m relates to goodwill. Post-employment benefits liabilities increased to £70.7m from£45.1m at the end of the previous financial year due to actuarialre-measurements. The main driver of these re-measurements was the significantfall in discount rates at the end of 2014/15, as a result of weak corporatebond yields. The Group's total contribution to the scheme will reduce to £4.8min the current financial year and is expected to be £4.4m in 2016/17. Net financial liabilities (including preference shares) increasedto £256.6m from £225.8m at the end of the prior financial year. The impact ofexchange rates in the period was to increase net financial liabilities by£11.5m, principally in relation to our US$ denominated private placementnotes. Net debt to adjusted EBITDA was 2.5x following the acquisition of AVIDTechnologies and reflecting the impact of foreign exchange movements in theyear. At the year end, headroom on bank borrowings was £181.2m underfacilities extended during the period to September 2019. This headroom,combined with our net cash position of £43.8m, continues to give us a securefunding position and will facilitate repayment of the preference shares ontheir maturity in 2016. In addition, the Group successfully refinanced $85m USPrivate Placement Notes due August 2016 until 2024. There were significant foreign exchange rate movements over thepast 12 months. In 2014/15, the average exchange rates for sterling againstthe US dollar and the Euro were, respectively, £1 = US$1.64 (2013/14: £1 =US$1.57) and £1 = €1.26 (2013/14: £1 = €1.18). Prior year comparatives forrevenues and adjusted operating profit benefited by £38.9m and £4.9m,respectively, as a result of the foreign exchange rates compared to 2014/15.We note the potential impact of recent volatile foreign exchange movementswhich, if current rates prevail in 2015/2016 (£ = US$1.47; £ = €1.39), willhave an adverse impact on the Group's reported profit of approximately £2.0mfor the current financial year compared to the average rates in 2014/15. Net finance costs in 2014/15 were £14.0m (2013/14: £16.7m). Thiscomprises net interest payable of £10.5m (2013/14: £12.4m), which was covered8.4 times by adjusted operating profit, and a net charge of £3.5m (2013/14:£4.3m) in respect of the Company's convertible preference shares. Thereduction in net finance costs reflects the repayment of the US$159m PrivatePlacement notes in June 2013, combined with the retranslation of US$ interestcharges on the Group's US$ Private Placement notes throughout the year, aswell as the benefit of the repurchase and cancellation of 712,948 preferenceshares. Adjusted profit before tax for the full year was £74.0m (2013/14:£76.3m), a decline of 3.0% on the previous year. Total profit before tax for2014/15 was £69.1m (2013/14: £74.8m), a decline of 7.6% on the previous year. The taxation charge represents an effective tax rate for the2014/15 financial year on profit before tax and preference dividends of 30.0%(2013/14: 29.9%). After including adjusting items the effective rate is 29.9%(2013/14: 30.0%). We expect that the effective tax rate should reduce in2015/16 by approximately 1% reflecting the continuing reduction in the UK taxrate. Adjusted basic earnings per share for the financial year are 13.8p(2013/14: 14.3p). Basic earnings per share after the net impact of adjustingitems are 12.9p (2013/14: 14.0p). Adjusted basic earnings per share for thesecond half are 6.6p (2013/14: 7.2p). Basic earnings per share after the netimpact of adjusting items are 6.1p (2013/14: 6.9p). The Board recommends that the final dividend is maintained at 6.0p per share(2013/14: 6.0p per share), making a total for the year of 10.4p per share(2012/13: 10.4p per share). The final dividend, subject to approval at theAnnual General Meeting on 16 June 2015, is payable on 25 June 2015 toshareholders on the register at 28 May 2015. Condensed Consolidated Income StatementFor the second half and full year ended 1 February 2015 2014/15 2013/14 2014/15 2013/14 Second Second Full Full half half year year unaudited unaudited unaudited audited Notes £m £m £m £mContinuing operationsRevenue 2 480.8 469.8 960.1 968.0Cost of sales (307.0) (294.6) (606.9) (605.1)Gross profit 173.8 175.2 353.2 362.9Net operating expenses- adjusted operating expenses (131.3) (129.7) (265.2) (269.9)- adjusting items 3 (2.5) (1.7) (4.9) (1.5)Total net operating expenses (133.8) (131.4) (270.1) (271.4)Operating profit- adjusted operating profit 2 42.5 45.5 88.0 93.0- adjusting items 3 (2.5) (1.7) (4.9) (1.5)Total operating profit 2 40.0 43.8 83.1 91.5Finance income 0.4 0.2 0.7 0.4Finance costs- interest payable (6.0) (5.2) (11.2) (12.8)- preference dividends (1.5) (1.7) (2.9) (3.5)- premium on redemption of preference shares (0.2) (0.4) (0.6) (0.8)Total finance costs (7.7) (7.3) (14.7) (17.1)Total profit before taxation 32.7 36.7 69.1 74.8Taxation 4 (10.3) (11.3) (21.6) (23.4) Profit for the period attributable to owners of the parent 22.4 25.4 47.5 51.4 Earnings per shareBasic 5 6.1p 6.9p 12.9p 14.0pDiluted 6.1p 6.9p 12.8p 13.9p Ordinary dividendsInterim - proposed 4.4p 4.4pFinal - proposed 6.0p 6.0pPaid 10.4p 10.4pImpact on shareholders' funds (£m) 38.2 38.1 Condensed Consolidated Statement of Comprehensive IncomeFor the second half and full year ended 1 February 2015 2014/15 2013/14 2014/15 2013/14 Second Second Full Full half half year year unaudited unaudited unaudited audited £m £m £m £mProfit for the period 22.4 25.4 47.5 51.4 Items that will not be reclassified to profit or lossRemeasurements of post employment benefit obligations (24.6) (5.2) (26.7) (4.0)Deferred tax credit on remeasurements of post employment benefit obligations 7.2 1.3 7.8 0.7Total items that will not be reclassified to profit or loss (17.4) (3.9) (18.9) (3.3) Items that may be reclassified to profit or lossNet exchange adjustments 1.5 (7.8) 0.3 (5.9)Net fair value gains on cash flow hedges 0.9 2.0 0.2 6.0Total items that may be reclassified subsequently to profit or loss 2.4 (5.8) 0.5 0.1 Total other comprehensive income for the period (15.0) (9.7) (18.4) (3.2) Total comprehensive income for the period attributable to owners of the 7.4 15.7 29.1 48.2parent The accompanying notes form an integral part of this unaudited condensed consolidated financial information. Condensed Consolidated Balance SheetAs at 1 February 2015 1 February 2 February 2015 2014 unaudited audited Notes £m £mASSETSNon-current assetsGoodwill 47.1 38.3Other intangible assets 40.4 32.6Investment held at fair value 1.0 0.8Property, plant and equipment 52.3 49.5Deferred tax assets 3.5 4.9Total non-current assets 144.3 126.1 Current assetsInventories 260.9 236.0Derivative financial instruments 6 2.4 2.0Trade and other receivables 142.5 128.9Current tax receivable 0.5 2.1Cash and cash equivalents 6 43.8 42.8Total current assets 450.1 411.8 LIABILITIESCurrent liabilitiesFinancial liabilities 6 (6.3) (1.8)Derivative financial instruments 6 (0.2) -Trade and other payables (130.7) (118.4)Current tax payable (12.7) (12.4)Total current liabilities (149.9) (132.6) Net current assets 300.2 279.2 Non-current liabilitiesFinancial liabilities 6 (296.3) (268.8)Retirement and other post-employment benefits (70.7) (45.1)Deferred tax liabilities (0.3) (6.7)Total non-current liabilities (367.3) (320.6) NET ASSETS 77.2 84.7 EQUITYOrdinary shares 18.6 18.6Equity element of preference shares 8.5 10.4Share premium 32.8 32.7Capital redemption reserve 5.2 4.4Hedging reserve 2.2 2.0Cumulative translation reserve 17.3 17.0Retained earnings (7.4) (0.4)TOTAL EQUITY 77.2 84.7 Consolidated Statement of Changes in EquityFor the year ended 1 February 2015 2014/15 2013/14 Full Full year year unaudited audited £m £m Total equity at beginning of period 84.7 72.2 Profit for the period 47.5 51.4Other comprehensive expense (18.4) (3.2)Total comprehensive income 29.1 48.2 Transactions with owners:Ordinary dividends paid (38.2) (38.1)Ordinary share capital subscribed 0.1 0.8Share-based payments 1.5 1.6Total transactions with owners (36.6) (35.7) Total equity at end of period 77.2 84.7 The accompanying notes form an integral part of this unaudited condensed consolidated financialinformation. Condensed Consolidated Statement of Cash FlowsFor the second half and full year ended 1 February 2015 2014/15 2013/14 2014/15 2013/14 Second Second Full Full half half year year unaudited unaudited unaudited audited Notes £m £m £m £m Cash flows from operating activitiesOperating profit 2 40.0 43.8 83.1 91.5Adjusting items:- net income statement impact 3 2.5 1.7 4.9 1.5- cash impact (4.3) (2.2) (7.0) (6.2)Non cash impact of adjusting items (1.8) (0.5) (2.1) (4.7)Depreciation and amortisation 7.9 8.5 15.3 17.7Changes in working capital (0.7) (1.4) (15.1) (23.7)Additional funding for post retirement defined benefit plans (2.0) (0.9) (3.9) (2.6)Other non-cash movements (0.3) 0.9 1.5 2.2Total cash generated from operations 43.1 50.4 78.8 80.4Interest received 0.4 0.2 0.7 0.4Interest paid (5.3) (5.0) (10.3) (12.4)Dividends paid on preference shares (1.5) (1.7) (2.9) (3.5)Taxation paid (9.0) (8.7) (17.4) (17.5)Net cash generated from operating activities 27.7 35.2 48.9 47.4 Cash flows from investing activitiesNet outflow from purchase of business - - (7.8) (2.2)Adjusting items:- cash impact of US property disposal (0.6) (0.1) (0.6) 3.9Proceeds from sale of property, plant and equipment - 0.3 - 0.3Purchase of property, plant and equipment (2.4) (3.0) (6.2) (5.1)Purchase of intangible assets (8.2) (6.9) (14.5) (12.7)Net cash used in investing activities (11.2) (9.7) (29.1) (15.8) Cash flows from financing activitiesIssue of ordinary shares - 0.3 0.1 0.8Purchase of preference shares - - (11.5) -Proceeds from bank loans 35.8 - 63.3 27.3Repayment of bank loans (35.1) (7.1) (35.1) (108.6)Dividends paid to ordinary shareholders (16.2) (16.1) (38.2) (38.1)Net cash used in financing activities (15.5) (22.9) (21.4) (118.6) Net increase/(decrease) in cash, cash equivalents and bankoverdrafts 1.0 2.6 (1.6) (87.0)Cash, cash equivalents and bank overdrafts at beginning of period 39.5 46.1 42.8 131.6Exchange gains/(losses) 3.3 (5.9) 2.6 (1.8)Cash, cash equivalents and bank overdrafts at end of period 43.8 42.8 43.8 42.8 Reconciliation of net financial liabilitiesNet financial liabilities at beginning of period (240.8) (245.6) (225.8) (229.6)Net increase/ (decrease) in cash, cash equivalents and bankoverdrafts 1.0 2.6 (1.6) (87.0)(Increase)/ decrease in debt (0.7) 7.1 (28.2) 81.3Purchase of preference shares - - 11.5 -Premium on redemption of preference shares (0.2) (0.4) (0.6) (0.8)Derivative financial instruments 0.9 2.0 0.2 4.2Amortisation of arrangement fees (0.4) (0.2) (0.6) (0.5)Exchange movement (16.4) 8.7 (11.5) 6.6Net financial liabilities at end of period 6 (256.6) (225.8) (256.6) (225.8) The accompanying notes form an integral part of this unaudited condensed consolidated financial information. Notes 1 Basis of preparation The unaudited condensed consolidated financial information in this report has been prepared based on International Financial Reporting Standards (IFRSs), as adopted by the European Union, and applying the accounting policies disclosed in the Group's 2013/14 Annual Report and Accounts on pages 82 to 86 except as described below. There are no new IFRS's or IFRIC's that are effective for the first time in the current year which have had a significant impact on the Group. This condensed consolidated financial information does not comprise statutory accounts within the meaning of Section 498 of the Companies Act 2006. Statutory accounts for the financial year ended 2 February 2014, were approved by the Board of Directors on 17 April 2014 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain any statement under Section 498 of the Companies Act 2006. Copies of the Company's Annual Report and Accounts are available from Premier Farnell plc, 150 Armley Road, Leeds, LS12 2QQ, England, or from the Company's website at www.premierfarnell.com. Going concern basis After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements. Estimates The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 2 February 2014. 2 Segment information 2014/15 Second half unaudited 2013/14 Second half unaudited Before Adjusting After Before Adjusting After adjusting items adjusting adjusting items adjusting items (Note 3) items items (Note 3) items £m £m £m £m £m £m Revenue Marketing and Distribution Division Americas 168.8 - 168.8 165.6 - 165.6 Europe and Asia Pacific 213.9 - 213.9 210.9 - 210.9 Other Distribution Businesses 60.5 - 60.5 55.2 - 55.2 Total Marketing and Distribution Division 443.2 - 443.2 431.7 - 431.7 Industrial Products Division 37.6 - 37.6 38.1 - 38.1 480.8 - 480.8 469.8 - 469.8 Operating profit Marketing and Distribution Division Americas 9.6 0.3 9.9 9.2 (0.7) 8.5 Europe and Asia Pacific 26.4 (0.2) 26.2 28.9 0.7 29.6 Other Distribution Businesses 6.1 - 6.1 6.6 - 6.6 Total Marketing and Distribution Division 42.1 0.1 42.2 44.7 - 44.7 Industrial Products Division 6.9 - 6.9 7.0 - 7.0 Head Office costs (6.5) (2.6) (9.1) (6.2) (1.7) (7.9) 42.5 (2.5) 40.0 45.5 (1.7) 43.8 2014/15 Full year unaudited 2013/14 Full year audited Before Adjusting After Before Adjusting After adjusting items adjusting adjusting items adjusting items (Note 3) items items (Note 3) items £m £m £m £m £m £m Revenue Marketing and Distribution Division Americas 333.1 - 333.1 347.1 - 347.1 Europe and Asia Pacific 436.4 - 436.4 435.9 - 435.9 Other Distribution Businesses 117.1 - 117.1 109.7 - 109.7 Total Marketing and Distribution Division 886.6 - 886.6 892.7 - 892.7 Industrial Products Division 73.5 - 73.5 75.3 - 75.3 960.1 - 960.1 968.0 - 968.0 Operating profit Marketing and Distribution Division Americas 19.5 - 19.5 19.7 0.6 20.3 Europe and Asia Pacific 57.2 (1.1) 56.1 60.3 0.2 60.5 Other Distribution Businesses 11.7 - 11.7 12.1 - 12.1 Total Marketing and Distribution Division 88.4 (1.1) 87.3 92.1 0.8 92.9 Industrial Products Division 13.7 - 13.7 14.0 - 14.0 Head Office costs (14.1) (3.8) (17.9) (13.1) (2.3) (15.4) 88.0 (4.9) 83.1 93.0 (1.5) 91.5 3 Operating profit 2014/15 2013/14 2014/15 2013/14 Statutory operating profit is stated Second Second Full Full after (charging)/crediting the following: half half year year unaudited unaudited unaudited audited £m £m £m £m - Restructuring costs (2.8) (2.6) (5.1) (3.9) - Net gain on US property disposal 0.3 0.1 0.3 1.6 - Acquisition costs - - (0.1) - - Remeasurement of the fair value of contingent consideration - 0.8 - 0.8 (2.5) (1.7) (4.9) (1.5) Due to their significance and nature, adjusted operating expenses and adjusted operating profit have been disclosed on the face of the income statement which excludes the items above. Restructuring costs incurred in the period relate to the Group's global business re-organisation and comprise the cost of redundancies completed in the period and change programme costs including consultancy in developing the proposed new organisational design. The £0.3 million net gain on US property disposal relates to savings on expenses incurred in the relocation of the MDD Americas Head Office. Acquisition costs of £0.1 million were incurred in the first half of the year in relation to the purchase of AVID Technologies. The net gain on US property disposal in prior year relates to the sale and relocation of the MDD Americas Head Office. Restructuring costs incurred in the prior year primarily relate to decisions taken to reflect re-alignment of focus on areas of greatest opportunity, drive efficiency of global operations and optimise financial performance. In addition, there was one-off gain in prior year related to a re-measurement of the fair value of contingent consideration payable in respect of the acquisition of Shenzhen Embest Technology Co Ltd. 4 Taxation The taxation charge represents an effective tax rate for the 2014/15 financial year on profit before tax and preference dividends of 30.0% (2013/14: 29.9%). After including adjusting items the effective rate is 29.9% (2013/14: 30.0%). 5 Earnings per share Basic earnings per share is calculated by dividing the profit attributable to owners of the parent for the period by the weighted average number of ordinary shares in issue during the period, excluding those shares held by the Premier Farnell Executive Trust. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume issue of all dilutive potential ordinary shares, being those share options and awards with a non-market based performance condition granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period. Reconciliations of earnings and the weighted average number of ordinary shares used in the calculations are set out below. 2014/15 2013/14 Second half unaudited Second half unaudited Basic per Diluted per Basic per Diluted per Earnings share amount share amount Earnings share amount share amount £m pence pence £m pence pence Earnings per share Profit attributable to owners of the parent 22.4 6.1 6.1 25.4 6.9 6.9 Restructuring costs 2.8 0.8 0.8 2.6 0.7 0.7 Tax attributable to restructuring costs (0.8) (0.2) (0.2) (0.7) (0.2) (0.2) Net gain on US property disposal (0.3) (0.1) (0.1) (0.1) - - Tax attributable to gain on US property disposal 0.1 - - - - - Acquisition costs - - - - - - Tax attributable to acquisition costs - - - - - - Remeasurement of contingent consideration - - - (0.8) (0.2) (0.2) Adjusted profit attributable to owners of the parent 24.2 6.6 6.6 26.4 7.2 7.2 Number Number Weighted average number of shares 367,709,615 367,681,704 Dilutive effect of share options 1,322,335 3,038,534 Diluted weighted average number of shares 369,031,950 370,720,238 2014/15 2013/14 Full Year unaudited Full Year audited Basic per Diluted per Basic per Diluted per Earnings share amount share amount Earnings share amount share amount £m pence pence £m pence pence Earnings per share Profit attributable to owners of the parent 47.5 12.9 12.8 51.4 14.0 13.9 Restructuring costs 5.1 1.4 1.4 3.9 1.1 1.1 Tax attributable to restructuring costs (1.5) (0.4) (0.4) (1.1) (0.3) (0.3) Net gain on US property disposal (0.3) (0.1) (0.1) (1.6) (0.4) (0.4) Tax attributable to net gain on US property disposal 0.1 - - 0.6 0.1 0.1 Acquisition costs 0.1 - - - - - Tax attributable to acquisition costs - - - - - - Remeasurement of contingent consideration - - - (0.8) (0.2) (0.2) Adjusted profit attributable to owners of the parent 51.0 13.8 13.7 52.4 14.3 14.2 Number Number Weighted average number of shares 367,511,796 367,069,378 Dilutive effect of share options 1,498,900 2,763,398 Diluted weighted average number of shares 369,010,696 369,832,776 Adjusted earnings per share has been provided in order to facilitate year on year comparison. 6. Net financial liabilities 1 February 2 February 2015 2014 unaudited audited £m £m Cash and cash equivalents 43.8 42.8Unsecured loans and overdrafts (250.1) (207.2)Net financial liabilities before preference shares and derivatives (206.3) (164.4)Preference shares (52.5) (63.4)Derivative financial instruments 2.2 2.0Net financial liabilities (256.6) (225.8) Net financial liabilities are analysed in the balance sheet as follows: Current assetsCash and cash equivalents 43.8 42.8Derivative financial instruments 2.4 2.0 46.2 44.8 Current liabilitiesOther loans (6.3) (1.8)Derivative financial instruments (0.2) - (6.5) (1.8) Non-current liabilitiesBank loans (66.4) (39.2)5.2% US dollar Guaranteed Senior Notes payable 2017 (20.0) (18.3)4.4% US dollar Guaranteed Senior Notes payable 2018 (38.8) (35.5)4.8% US dollar Guaranteed Senior Notes payable 2021 (60.7) (55.4)4.0% US dollar Guaranteed Senior Notes payable 2024 (56.5) (51.8)Other loans (1.4) (5.2)Preference shares (52.5) (63.4) (296.3) (268.8) At 1 February 2015, the Group's syndicate bank facilities totalled £250 million expiring in September 2019. Based onthese facilities, the headroom on bank borrowings at 1 February 2015 was £181.2 million. 7. Retirement benefit obligations The valuation of the Group's defined benefit pension schemes in the UK and the US has been updatedat 1 February 2015 on an actuarial basis, applying current discount and inflation rate assumptionsand incorporating the market value of assets at 1 February 2015. Remeasurements of post employmentbenefit obligations in the year of £26.7 million (£18.9 million net of associated deferred tax) havebeen taken through the Consolidated Statement of Comprehensive Income. 8. Exchange rates The principal average exchange rates used to translate the Group's overseas profits were as follows: 2014/15 2013/14 2014/15 2013/14 Second Second Full Full half half year year US dollar 1.59 1.62 1.64 1.57Euro 1.28 1.19 1.26 1.18 9. Ordinary dividend The directors are proposing a final dividend in respect of the year ended 1 February 2015, of6.0p per share which will absorb £22.0 million of shareholders' funds. As the final dividend issubject to approval at the Annual General Meeting of the Company, to be held on 16 June2015, it has not been provided for as at 1 February 2015. Once approved, the final dividendwill be paid on 25 June 2015 to shareholders on the register of members on 29 May 2015. 10. Related party transactions

The Group has not entered into any material transactions with related parties in the year.