Trading Statement
Electrocomponents PLC
22 March 2005
Embargoed until 7.00am 22 March 2005
Electrocomponents plc - Trading Update
Prior to its financial year-end on 31 March 2005, Electrocomponents plc, the
major international high service distributor of electronic, electrical,
industrial and commercial supplies, is today giving a trading update.
The Board expects that Group profit before tax and goodwill amortisation for the
year ending 31 March 2005 will be slightly below last year. While many of our
businesses have shown good profit progression in this year, this progress has
been offset by continued pressure on gross margins, higher planned costs on our
systems projects, further investment in selling activities and higher pension
contributions.
Since we announced our first half results in November, the economic backdrop in
the UK and our other major European markets has weakened as reflected by the
decline in the Purchasing Manager Indices. Consequently, Group sales in the
second half have grown by about 3% (at constant exchange rates and day adjusted)
compared with 5.8% in the first half. February was a poor sales month in both
the UK and Continental Europe, with sales falling below our internal forecasts.
In March, the incidence of Easter in the last week of our financial year is
likely to have a detrimental effect on sales, but the extent is difficult to
predict. (Last year, Easter fell in April.)
In the United Kingdom, our sales in the second half have declined by about 1.5%
on last year. Allied, in the United States, has continued to achieve strong
double digit sales growth with stable gross margins. Our businesses in Japan,
China and the rest of Asia, including Australasia, have grown strongly. In
Continental Europe, sales in France were slightly ahead of the second half of
last year, recovering from a 2.6% decline in the first half, whilst growth
elsewhere has been about 4%.
E-commerce sales have again grown rapidly during this half-year, up about 35% on
the second half of last year, and currently running at over 22% of the Group's
sales.
As previously indicated, the next European implementation of our systems project
is in the United Kingdom: our current plans show that this should take place
towards the end of the next financial year. In Asia the implementation in Hong
Kong should be in the first quarter of the next financial year.
Free cash flow for the current year will be lower than for the prior year. This
mainly reflects the cash expenditures on the systems and other projects and
higher stock levels to support sales growth and improved service levels. The
build up of stock to support the systems implementation in the United Kingdom is
now planned for the next financial year.
The full results for the current year will be announced on 25 May 2005.
International Financial Reporting Standards will be used in reporting the
results for next year whilst the current year results will then be re-stated
using these Standards. A separate announcement of the estimated impact of this
re-statement will be made in July.
There will be a telephone conference call today at 10.00am for analysts and
investors. Dial-in instructions are set out below.
Enquiries:
Ian Mason Group Chief Executive 01865 204000
Jeff Hewitt Deputy Chairman / Finance Director 01865 204000
Details of telephone dial in instructions:
Date: 22 March 2005
UK Time: 10:00 am
UK Dial-In: 0845 2453471
Europe & International Dial-In: +44 1452542300
Canada Dial In: +44 1866 4765524
USA Dial-In: +44 1866 2201452
Quote Reference Number: 2753994
Chairman: Jeff Hewitt
Electrocomponents plc
Safe Harbour Statement:
This announcement contains certain statements, statistics and projections that
are or may be forward-looking. The accuracy and completeness of all such
statements, including, without limitation, statements regarding the future
financial position, strategy, projected costs, plans and objectives for the
management of future operations of Electrocomponents plc and its subsidiaries is
not warranted or guaranteed. These statements typically contain words such as
'intends', 'expects', 'anticipates', 'estimates' and words of similar import. By
their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur in the future.
Although Electrocomponents plc believes that the expectations reflected in such
statements are reasonable, no assurance can be given that such expectations will
prove to be correct. There are a number of factors, many of which are beyond the
control of the Electrocomponents plc, which could cause actual results and
developments to differ materially from those expressed or implied by such
forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange