LONDON (Alliance News) - Engineering firm Electrocomponents PLC boosted its interim dividend Tuesday after profit and revenue grew strongly, with the second half of the year also experiencing a "good start" despite a slow down.
For the six months ended September, pretax profit widened 23% to GBP93.0 million from GBP75.7 million the year prior. This was after revenue rose 11% to GBP911.8 million from GBP823.8 million the year before, on a like-for-like basis it grew 9.8%.
Profit performance was held back by exceptional costs associated with impairments of acquired assets, reorganisation costs and one-off pension payments. Excluding these, adjusted pretax profit grew 27% to GBP100.2 million from GBP79.0 million the year before.
"We are making progress on our journey to become first choice for customers, suppliers and employees and have delivered a good performance in the first half with strong like-for-like revenue growth, market share gains and improved profitability," Electrocomponents Chief Executive Officer Lindsley Ruth said. "We have seen a good start to the second half of the year with around 7% like-for-like revenue growth in the first seven weeks."
Electrocomponents proposed a 5.3 pence per share interim dividend, up 1.0% from 5.25p the year before.
"While the external environment in some of our key markets is uncertain, we remain focused on driving organic performance, growing our market share in all three regions and managing our cost base," Ruth added. "We aim to continue to augment organic growth with opportunistic value-accretive acquisitions as we drive continued consolidation in our large fragmented industry. We continue to be well positioned to make strong progress in the current financial year."
The FTSE 250-listed firm emphasised it was "on track" to deliver its cost savings targets. Electrocomponents expects to generate GBP4 million in annualised savings by the end of financial 2019, the current financial year. By financial 2021, the firms expects to have generated GBP12 million per year in savings.
Shares in Electrocomponents were 6.1% lower at 574.60 pence on Tuesday.
