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29 Jul 2015 07:00
PREMIER FARNELL PLC - Trading StatementPREMIER FARNELL PLC - Trading Statement
PR Newswire
London, July 28
29 July 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 a trading statement to update its outlook for the second quarter(Q2) and first half of the current 2015/2016 financial year. The Group’s interim results will be published on 17th September 2015.
Following our first quarter (Q1) trading update in June, Group sales per day momentum has slowed significantly, particularly in our North American and UK markets. Group sales growth per day in the second quarter is now expected to be 1.2% versus the 5.4% delivered in the first quarter. Excluding Raspberry Pi, Group sales per day growth is expected to be 0.8% in the second quarter, compared to 1.9% in the first quarter.
Reflecting the trading performance and the impact of current exchange rates, we now expect adjusted operating profit in the first half to be down approximately 10% on the first half of last year. This excludes the impact of a circa £2.0m provision release relating to the successful outcome of a potential legal action. Including the provision release, adjusted operating profit is expected to be approximately 6% down year on year.
Expected Divisional sales per day growth rates
| Q1 2015/2016 | Q2 2015/2016 | H1 2015/2016 | |
| Europe | 5.9% | 2.2% | 4.1% |
| Americas | 2.2% | 0.4% | 1.3% |
| APAC | 16.2% | 10.6% | 13.3% |
| element14 | 5.3% | 2.2% | 3.8% |
| CPC & MCM | 13.9% | -1.6% | 6.0% |
| Akron Brass (IPD) | -6.1% | -4.7% | -5.4% |
| Group | 5.4% | 1.2% | 3.3% |
Note: Sales growth is based on sales per day for continuing businesses at constant exchange rates and for like for like periods.
For the first half, Group sales per day are expected to be up 3.3%. element14 sales per day growth is expected to decrease to 2.2% in Q2 versus 5.3% in Q1 caused by constrained availability of Raspberry Pi and slowing across all regions.
European sales growth declined to 2.2% in Q2, with a lower level of growth in Continental Europe, notably in the key markets of Germany and France, although this was partially offset by continued double digit growth in Spain and Italy. Americas sales growth slowed to 0.4% in Q2, impacted by a weak June performance.
Sales growth in APAC declined to 10.6% in Q2 driven by a deceleration in most markets and lower level of Raspberry Pi sales.
CPC and MCM delivered negative growth of -1.6% in Q2 following the strong Q1 sales performance related to the launch of Raspberry Pi 2 in Q1.
Akron Brass sales declined 4.7% in Q2, an improvement on the prior Quarter’s performance of -6.1%, as contracts which were postponed in Q1 are starting to be fulfilled. Based on the strengthening order book, we anticipate that Akron Brass will return to growth in the second half.
Gross margin is anticipated to improve slightly in Q2 on the level seen in Q1. Operating costs have continued to be managed tightly and we remain focused on reducing operating costs and driving efficiencies in order to optimise operating profit.
Laurence Bain, Group Chief Executive, commented:
"Despite implementing a number of initiatives to drive sales and expand our gross margin, we have been impacted by a slowdown in and a more difficult trading environment since we reported our Q1 numbers. Although we continue to focus on delivering the cost savings identified in our global operating model, given the recent weakness in some of our core markets and prevailing exchange rates, we now expect adjusted operating profits in the second half to be at similar levels to those in the first half (excluding the benefit of the £2.0m provision release).
In light of these challenging trading conditions, the Board has recently commenced a review of the Group’s operations and will provide an update on this review in September as part of the interim results announcement.”
A conference call for analysts and investors will be held at 8.00am this morning, 29 July 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:
| Dial-in: +44(0)20 3364 5381 Confirmation Code: 3831026 |
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.
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