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Electronics Production | December 23, 2008

Electrocomponents to reduce its cost base by £15m in the next financial year

At the half year results announcement on 11 November Electrocomponents reported that the Group’s sales in October had declined by 3% with the UK declining by 4.5% and International by 2.5%. Since then, demand has weakened further. The Purchasing Manager Indices have fallen to record low levels in its major markets and customers are deferring projects and extending plant shut downs.
This has been reflected in Group sales which, for the period from 1 October to 19 December 2008, have declined by around 5% with the UK business declining by around 6% and International by around 5%.

Within International, Europe’s performance was consistent across the period whilst both the North American and Asia Pacific businesses moved from sales growth in October to decline in November and December.

"Given the tougher economic environment we are accelerating our cost reduction plans and targeting to reduce our cost base by an annualised £15m in the next financial year. This will be achieved by exploiting operational efficiencies from increasing e-Commerce channel share, our European logistics strategy, the benefits from our EBS platform, and local initiatives", the company said.

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