ECM.L Regulatory News (ECM)

17 Jul 2009 07:00



ELECTROCOMPONENTS PLC

Interim Management Statement 

Electrocomponents plc, the leading high service distributor to engineers worldwide, has today issued its first interim management statement for the year ending 31 March 2010.

Revenue (1)

Since we last reported at the end of May the trading environment in our major markets has remained stable, with the sales trend in the first quarter of the current financial year being similar to the final quarter of last year.

Group revenue in the first quarter declined by 17% year on year with the International business declining by 19% and the UK by 14%. Within the International business Europe declined by 17%, North America by 22% and Asia Pacific by 16%.

The Purchasing Managers' Indices in our major markets have shown some improvements since March although they remain at low levels. 

We continue to implement our strategy, in particular strengthening our electronics and e-Commerce offers while driving our market leading offer for maintenance customers. Our expanded electronics range has been well received by our customers and we plan to add more products through the year. We have also added further functionality to our web sites and our e-Commerce sales have continued to grow, led by North America where revenue from this channel increased in the first quarter by more than 60% year on year. This channel now represents around 40% of Group sales.

Gross margin 

The Group's gross margin has been at a similar level to the first half of the previous financial year at around 49.1%.

Operating costs

The business continues to control its cost base with operating costs (at constant currency) lower than last year. We are on track to deliver the previously announced annualised cost savings of around £18m of which around £15m are expected to be realised this year.

Cash flow and borrowings

The Group's cash flow generation has continued to be strong benefiting from our ongoing focus on working capital, with further improvements in stock, debtor and creditor balances, and control of capital expenditure.  As at 30 June 2009 net debt was around £162m compared to £203m at 31 March 2009, benefiting from the first quarter cash flow and the strengthening of Sterling since the year end.

The Group has robust financial metrics and a strong balance sheet with total committed multi-currency facilities available to the Group at 30 June 2009 of around £298m with almost all having a maturity date of September 2012.  

Ian Mason, Group Chief Executive, commented: 

"The Group's revenue trend has been stable over the last six months with reduced costs year on year and strong cash flow. 

We continue to focus on implementing our strategy, controlling our cost base and maintaining our financial strength. 

The Group is well positioned for the future with a broad spread of international businesses, an extensive electronics and maintenance customer base, high service offer and realigned cost structure."

Enquiries: 

Ian Mason Group Chief Executive 01865 204000 

Simon Boddie Group Finance Director 01865 204000 

John Sunnucks/ Tulchan Communications 020 73534200 

David Allchurch

Notes:

(1): All revenue growth rates are adjusted for trading days and foreign exchange rate movements.

There will be a telephone conference call today at 08.00h for analysts and investors with replay access to 31 July. Dial in instructions are set out below.