PFL.L Regulatory News (PFL)

PREMIER FARNELL PLC - Trading Statement

PR Newswire

London, June 17

18 June 2015

Premier Farnell plc – Trading statement

Premier Farnell plc (“the Group”), a global leader in the high service distribution of technology products and solutions, today issues its trading statement for the period 2 February to 3 May 2015.

Trading performance

Divisional sales per day growth rates

Note: Sales growth is based on sales per day for continuing businesses at constant exchange rates and for like periods. For reference, in the first quarter, the average exchange rates for sterling against the US dollar and the Euro were, respectively, £1 = US$1.52 (Q1 2014/15: £1 = US$1.67) and £1 = €1.37 (Q1 2014/15: £1 = €1.22).

Group sales per day grew 5.4% (1.9% excluding Raspberry Pi) in the first quarter underpinned by strength in element14.

element14 sales per day increased by 5.3%, benefitting from strong Raspberry Pi2 (Rpi) sales which were up 110% in the period.

European sales growth was 5.9%. Weakness in the UK was offset by a strong Continental Europe performance which had growth of 12.2% in the period.

Despite the slowdown in manufacturing PMI data seen in North America towards the end of our quarter, Americas sales growth was up 2.2%.

Sales in APAC continued to advance, up 16.2% in Q1. The region continues to show steady growth, although the China performance was impacted by a slowing in manufacturing demand, evidenced by the consecutive weaker PMI data in March and April.

CPC and MCM delivered 13.9% growth in the period driven by strong Raspberry Pi sales, although CPC, the primarily UK-focused business, showed some softness in the quarter, particularly during the month of April, which was consistent with the slowdown seen in UK manufacturing output for that month.

Akron Brass sales declined 6.1% on a like for like basis. Akron export sales were impacted by the strong US$ in the first three months of the quarter and the weak oil and gas segment which resulted in project delays and cancellations.

Despite the higher sales volumes, Group gross profit at constant currency was 2% lower year on year. Gross margin declined sequentially 1.2ppts versus Q4 last year. This was due principally to the impact of the higher than expected Raspberry Pi sales and adverse foreign exchange movements, particularly the Euro.

We remain focused on reducing operating costs and continue to drive efficiencies in order to optimise operating profit. SG&A as a percentage of sales decreased in Q1 to 26.9% on a constant currency basis, some 1.7ppts lower than Q1FY15, which partially offset the gross margin impact above. The implementation of our new global organisation structure is progressing to plan and we are on track to deliver £3-£4million benefit in 2015/16. We expect to see the majority of these savings in the second half.

During the quarter, we continued to progress our strategy. We have gone live with the online production proposition which will enable customers to benefit from greater functionality, such as date and lot code and traceability on their orders. We expect these developments to continue our digital transformation towards our 70% e-commerce target. In our online community, we saw registered membership numbers increase 40% quarter on quarter. Development kit sales were up 17% in Q1 over the prior year. 

Laurence Bain, Group Chief Executive, commented:

"We are pleased with the overall performance in the first quarter, which has seen sales increase 5.4% on a like for like basis, driven by a strong performance in single board computers, especially Raspberry Pi following the launch of the new model. However, currency headwinds continue to impact our business.

We are making good progress on the execution of our strategy to generate growth and drive cost savings through the implementation of our new global operating structure. Whilst we expect first half adjusted operating profit to be marginally below the prior year, we anticipate adjusted operating profit for the full year to be broadly in line with the prior period as we see the benefit of margin and cost actions taken in the second quarter delivering growth in the second half.”

A conference call for analysts and investors will be held at 8.30am this morning, 18 June 2015, details for which are as follows:

Participant Access: Dial in 5-10 minutes prior to the start time using the number / Conference ID below:

For further information, please contact:

Laurence Bain, Chief Executive Officer Premier Farnell plc +44 (0) 20 7851 4107

Mark Whiteling, Chief Financial Officer

Nicole Nordwall, Investor Relations

Richard Mountain FTI Consulting +44 (0) 20 3727 1374

Premier Farnell’s announcements and presentations are published at www.premierfarnell.com together with business information and links to all other Group web sites.

The 2014/2015 Annual Report and Accounts is now available online at annualreport.premierfarnell.com

The results for the first half of the 52 week financial year ending 31st January 2016 will be announced on 17 September 2015.