Electrocomponents pleased with performance amid 'challenging' markets

(Sharecast News) - Electrocomponents updated the market on its overall trading for the four months ended 31 January on Tuesday, saying its performance remained consistent with the first six weeks of the second half.
It said it was continuing to see modest growth and continued market share gains despite ongoing uncertainty in some of its key underlying markets.

Like-for-like revenue growth was 3% in Northern Europe for the four months ended 31 Jan, compared to 5% in the first half ended 30 September, while Southern Europe saw growth remain stable at 5%.

Central Europe's growth was 3%, up from 2% in the first half, while emerging markets saw its growth slip to 9% from 33%.

The Americas reported like-for-like revenue growth of 9% for the period, down from 3%, while Asia Pacific saw its growth slip to 1% from 2%.

Electrocomponents said all three of its regions remained in "modest" growth, explaining that within Europe, Middle East and Africa, its Central Europe operation was impacted by a continued slow performance in Germany.

Industrial market share gains continued to offset ongoing softness in the electronics market, the board said.

Trading continued to show some volatility from week to week, the directors explained, especially around the calendar year end, although they did note that January was above the average for the period.

Electrocomponents said its 'RS PRO' product outperformed the group with 10% like-for-like growth., while digital like-for-like revenue grew broadly in line with its expectations.

The company said it was continuing to "take actions" to maintain, and where possible improve, its gross margin.

Given the impact of product mix and OKdo, it said it was still expecting a decline in gross margin for the full year.

"During the first four months of H2 we have executed well, driving market share gains against an uncertain market backdrop," said chief financial officer David Egan.

"We continue to actively manage our operating costs, while increasing investment in strategic initiatives to position the business for the significant longer-term market opportunity.

"Whilst our markets are challenging, we remain well positioned to deliver good progress."

Electrocomponents also announced on Tuesday that Lindsley Ruth was set to resume his role as chief executive officer from 10 February.

The company's board had announced on 11 November that Ruth was taking a temporary leave of absence to receive treatment for a medical condition.

"We are delighted that Lindsley is now fit and able to return to his role as chief executive officer," said chairman Peter Johnson.

At 1024 GMT, shares in Electrocomponents were up 4.98% at 704.6p.