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Components | June 17, 2011

Successful fiscal 2010 for Electrocomponents plc

"It has been an excellent year for Electrocomponents with Group sales exceeding GBP 1 billion for the first time and an increase in headline profits of over 50%", states Ian Mason, Group Chief Executive, comments.
Financial Highlights

- Strong underlying sales growth of 21%, with all regions delivering double digit growth
- Gross margin stable through the year
- Significant cost leverage with operating costs reducing by 3% points of sales to 37%
- Headline profit before tax increasing by more than 50%
- Return on capital employed increasing by 7.5% points to 24.2%
- GBP 57m free cash flow with significant working capital investment to drive sales growth
- Full year proposed dividend increased by 5% to 11.5p per share

Operational Highlights

- International business now contributing 70% of Group sales with 25% sales growth
- Electronics the fastest growing category with 30% growth supported by 37k new products
- DesignSpark, the Group’s online design tool attracting 400k visitors since launch
- 37% Group eCommerce growth with revenue share now over 50%
- Strong UK business recovery with profit now above pre-recession levels
- Successful expansion into large Eastern European market

Current trading and outlook

In the first seven weeks of the new financial year sales growth rates have remained strong at around 16% with the UK growing by 8% and the International business by 19%. Within International, Continental Europe has grown by 20%, North America by 18% and Asia Pacific by 17%.

Whilst recognising the more demanding comparatives ahead, we believe that the progress the Group has made on its strategic priorities and the investment that we continue to make in our International markets, electronics and eCommerce initiatives positions us well to make good progress in the coming year.

Ian Mason, Group Chief Executive, comments

"It has been an excellent year for Electrocomponents with Group sales exceeding GBP 1 billion for the first time and an increase in headline profits of over 50%. We have delivered very strong underlying sales growth of 21%, with all regions reporting double digit increases. With 70% of the Group's revenues now coming from the International business we are well placed to benefit from the long term structural growth opportunity along with improving margins from operating cost leverage. As a result we are recommending an increase in our final dividend of 8%.

“eCommerce and electronics continue to transform our business. Over half of our sales are now made through the web and we are continuing to enrich the online customer experience as we accelerate progress towards our target of 70% of Group revenues coming from eCommerce. Our ongoing investment in the electronics portfolio with the introduction of over 37,000 new products from leading suppliers has helped drive 30% electronics revenue growth.

“Electrocomponents is the leading high service distributor globally in a growing and highly fragmented marketplace. This year we have continued to take share from smaller competitors who cannot match our product range and unrivalled customer service, and as the market leader we see excellent long-term growth potential for the Group.”

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