PFL.L Regulatory News (PFL)

Premier Farnell plc - Trading Update 5 February 2015 Premier Farnell plc ("the Group"), a global leader in high service distributionof technology products and solutions, today announces a trading update for theyear to 1 February 2015 and its outlook for the current 2015/16 financial year.Full year results will be published on 19th March 2015. Trading performance - 2014/15 Positive momentum in sales growth has been delivered through the second half,with Group sales per day growth of 4.0% expected in the fourth quarter. For thefull year 2014/15, Group sales are expected to grow 3.3% year on year. Sales growth Q3 2014/15 Q4 2014/15 H2 2014/15 FY 2014/15 Element14 Europe 1.0% 4.6% 2.8% 1.9% APAC 13.6% 14.0% 13.8% 16.2% Americas 1.8% 0.9% 1.4% 1.1% 2.5% 3.9% 3.2% 2.9% CPC & MCM (MDD 9.2% 8.9% 9.0% 7.9%other) Akron Brass -5.8% -2.2% -3.9% 1.2%(IPD) Group 2.7% 4.0% 3.3% 3.3% Notes: Throughout this statement, sales growth is based on sales per day, includingRaspberry Pi, for continuing businesses at constant exchange rates and for likeperiods. For reference, in the fourth quarter, the average exchange rates forsterling against the US dollar and the Euro were, respectively, £1 = US$1.55(Q4 2013/14: £1 = US$1.64) and £1 = €1.29 (Q4 2013/14: £1 = €1.21). The Group's second half sales growth has been underpinned by our element14 andCPC & MCM distribution businesses. Within the element14 results, Europe hasdelivered a notable acceleration in sales growth which follows the rollout ofthe new web platform in the region. Following the rollout in China at the endof the year, the new web platform implementation is now substantially completeacross the global element14 business. Akron Brass performed slightly ahead ofour expectations with strong comparative growth in the prior year resulting ina second half sales decline of only 3.9%. We have continued to make progress in the execution of our strategy. Embest andAVID have delivered strong sales growth, reflecting our unique proposition tocomponent manufacturers and our strategy of growing with these customers. Wehave successfully grown our sales in small production volumes to themanufacturing customer segment; we have achieved a strong sales performance ofdevelopment kits (up over 20% year on year in the second half) and insemiconductors - both of which are lower margin but strategically importantproduct categories. In addition, in preparation for this week's launch of the Raspberry Pi 2, wehave sold down our existing inventory of the previous Raspberry Pi model duringthe fourth quarter. As a result, Raspberry Pi sales were only slightly belowthe fourth quarter of the prior year. As expected, the combination of our strategic initiatives and discounting ofthe Raspberry Pi impacted our gross margin in the period and we anticipate adecline of approximately 1 percentage point in second half gross margincompared to the same period of the prior year. Costs continue to be tightlycontrolled and are expected to be flat as a percentage of sales compared to thesecond half of last year. Given these factors, we now expect second half operating margin to be down 1percentage point over the comparable period, with operating profit for the fullyear in the range of £86m to £88m. Outlook - 2015/16 We anticipate that our progress in 2015/16 will be influenced by improved salesmomentum through our customer-centric strategy, a moderated level of grossmargin compared to 2014/15, rigorous focus on cost control and expandedstrategic transformation programmes, as well as the revised phasing of ourenhanced global rationalisation plans. We have made substantial progress in the design of our proposed new globalorganisational structure. We have increased our annualised cost saving targetto £10m to £12m (previously £6m to £8m). To achieve this increased target,phasing will now be spread over two years, with approximately £3m to £4m ofbenefit in 2015/16, (previously £6m to £8m), and a further £7m to £8m ofbenefit in 2016/17. Exceptional costs associated with the design of theproposed new structure of approximately £5m will be recognised in 2014/15 andwe anticipate a further £5m of costs will be incurred in 2015/16. Finally, we note the potential impact of recent volatile foreign exchangemovements which, if current rates prevail in 2015/2016 (£ = US$1.52; £ = €1.33), will have an adverse impact on the Group's reported profit ofapproximately £2m for the current financial year compared to the average ratesin the fourth quarter. A conference call for analysts and investors will be held at 8.00am on 5February 2015, details for which are as follows: Participant Access: Dial in 5-10 minutes prior to the start time using thenumber / Conference ID below. Confirmation Code: 2979803 Dial-in: +44 (0) 20 3427 1900 For further information, contact: Laurence Bain, Chief Executive Premier Farnell plc +44 (0) 20 7851 4107Officer Mark Whiteling, Chief FinancialOfficer Thomas Churchill, InvestorRelations 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 otherGroup web sites. The 2013/14 Annual Report and Accounts is now available for download atreporting2014.premierfarnell.com. The results for the 52 week financial yearending 1 February 2015 will be announced on 19 March 2015.