Electrocomponents underlying sales up despite UK decline

A strong performance in North America helped electronic goods distributor Electrocomponents grow underlying sales 3% to £616.4m in the six months to 30 September as adjusted pre-tax profits decline 16%, in-line with expectations.Sales grew 5% in the firm's international division, but fell 2% in the UK because of challenging market conditions, the group said.Chief executive (CEO) Ian Mason, who will be stepping down at the end of financial year after a 20-year spell, admitted the UK and France were in decline in the period and below management expectations."Whilst mindful of the more challenging economic environment across Europe, we are progressing at pace with the actions to improve performance in these markets."During the second half we will be continuing the planned investment in the strategy and are confident that it will enable us to progressively grow our market share and improve our financial performance over the medium term."Headline profit before tax fell by 16% to £37.4m, with 10% due to fewer trading days and currency, while reported profit before tax profits were up 24.4% at £55.5m, the firm said.Broker N+1 Singer summed up the investment stance as it sees it."Electrocomponents is a play on global industrial activity. It has a range of electronics and maintenance products with the latter typically part of a manufacturing process."If a part fails then Electrocomponents can supply the replacement - this has driven the high service distribution model."The group has the most diversified geographic base which should provide greater protection if European recovery fails to materialise."Its earnings valuation looks up with events although its dividend and FCF yield may provide some support to the share price."