29th Mar 2007 07:01
Electrocomponents PLC29 March 2007 Embargoed until 7.00am 29 March 2007 Electrocomponents plc - Trading Update Electrocomponents plc, the leading global high-service distributor ofelectronic, electrical and industrial supplies, is today giving a trading updateahead of its results for the year ending 31 March 2007. The implementation of the Group's strategy is proceeding well and, while thereremains much work to do, customers are valuing our improved EEM and MRO offers,evidenced by the Group's strong revenue growth. In the second half of the year, Group revenue (adjusted for exchange rates andtrading days) has continued to grow at around 9%. Within this, theInternational business has grown by around 13.5%, slightly lower than the 15% inthe first half, and in the UK, business growth has increased to around 2.5%,from 1% in the first half. The strengthening of Sterling, particularly againstthe US Dollar, will reduce the Group's reported revenue growth to around 5% inthe second half. The Group's gross margin in the second half of the year has been slightly lowerthan in the first half, due largely to the strong growth of our North Americanbusiness, which has lower margins. The building of a new warehouse and office in North America is proceeding toplan, with the move to the new facility expected to be made in the middle of thenext financial year. One-off move costs of around £1m are expected to beincurred in the next financial year. The Enterprise Business System went live successfully in Germany, Italy andAustria in January. 90% of the UK and European revenue is now on the EBSplatform. EBS costs for the financial year are expected to be around £20mversus £25m last year. The remaining EBS implementations in Europe (comprisingfour further businesses) are scheduled for the first half of the next financialyear. The Group has maintained its tight control of costs, which have fallen as apercentage of revenue. The head office move has been completed giving benefits of around £1m per annumand a profit on sale of around £2m. The total annualised benefit of the ongoingprogramme to create a lower cost infrastructure is now around £7m, against thetarget of £10m. The Board anticipates that headline Group profit before tax for the year ending31 March 2007 (adjusted for reorganisation costs and the profit on the sale ofthe head office building) will be at the upper end of our expectations. The full results for the year will be announced on 30 May 2007. There will be a telephone conference call today at 09.00am for analysts andinvestors. Dial-in instructions are set out below. Enquiries: Ian Mason Group Chief Executive 01865 204000Simon Boddie Group Finance Director 01865 204000Diana Soltmann Flagship Consulting 020 7886 8440 Details of telephone dial-in instructions: Date: 29 March 2007UK Time: 08:50h for 09:00h UK Local Call Dial-In: 0845 302 2569UK Free Call Dial-In: 0808 2380678Europe & International Dial-In: + 44 (0) 1452 587 436Canada Toll Free Dial-In: 1866 645 2898USA Toll Free Dial-In: 1866 854 5856Quote Reference Number: 3046752Chairman: Ian Mason Electrocomponents plc Safe Harbour Statement: This announcement contains certain statements, statistics and projections thatare or may be forward-looking. The accuracy and completeness of all suchstatements, including, without limitation, statements regarding the futurefinancial position, strategy, projected costs, plans and objectives for themanagement of future operations of Electrocomponents plc and its subsidiaries isnot warranted or guaranteed. These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. Bytheir nature, forward-looking statements involve risk and uncertainty becausethey relate to events and depend on circumstances that will occur in the future.Although Electrocomponents plc believes that the expectations reflected in suchstatements are reasonable, no assurance can be given that such expectations willprove to be correct. There are a number of factors, many of which are beyond thecontrol of Electrocomponents plc, which could cause actual results anddevelopments to differ materially from those expressed or implied by suchforward-looking statements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ECM.L