(Alliance News) - Electrocomponents PLC on Tuesday posted a dive in profit for the first half of financial 2021 but said it has seen market share gains and momentum across all its regions in the second half.
Shares in the FTSE 250-listed distributor of industrial and electronics products were trading 3.9% higher at 795.00 pence each on Tuesday morning in London.
For the six months ended September 30, Electrocomponents posted pretax profit of GBP55.6 million, down 38% year-on-year from GBP89.0 million. This was as revenue fell 7.1% to GBP908.9 million from GBP978.7 million, and administrative expenses rose 3.4% to GBP39.0 million.
The company noted trading was significantly hurt by the Covid-19 pandemic, with many of its customers reducing output or closing temporarily during regional lockdowns. Electrocomponents said it incurred GBP8.8 million of Covid-19 costs in relation to increased outbound freight costs and additional operational costs to support remote working.
Looking ahead however, it stated: "Over the first five weeks of the second half, we have continued to see momentum across all regions. However, we remain acutely aware of the challenges and uncertainty we all face as we navigate through this global pandemic, with further lockdown restrictions in some of our key markets meaning Covid-19 related costs are unlikely to ease slightly as previously hoped. Thus, although we are confident about the strength of our business, we remain cautious about the economic backdrop and short-term uncertainties."
Electrocomponents reinstated dividends, declaring an interim payout of 6.1p per share, up 3.4% from 5.9p the year prior, plus an additional interim dividend of 9.5p.
In June, the company deferred the decision to pay a final dividend for financial 2020, stating at the time it would consider making an additional interim payout for the first half of financial 2021. On Tuesday it said the previously deferred dividend of 9.5p would be paid as an additional interim dividend.
As at September-end, the London-based company had cash of GBP242.6 million, up from GBP93.7 million at September 30, 2019.
By Ife Taiwo; ifetaiwo@alliancenews.com
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