Electrocomponents : Interim Management Statement

ELECTROCOMPONENTS PLC

Interim Management Statement

Electrocomponents plc, the global distributor for engineers, has today issued an interim management statement for the year ending 31 March 2015 ("2015"), which covers the first quarter ended 30 June 2014

First quarter sales performance has been good in most markets, except the UK and France. After adjusting for trading days (1) and foreign exchange (2), Group underlying sales growth (3) in the first quarter was 3%, with an improved sales performance in May and June of 4%. Our International business, which comprises over 70% of Group revenues, grew by 5% and the UK declined by 2% (UK ex-Raspberry Pi declined by 1%). Within International, Continental Europe grew by 2%, impacted by a weaker market in France, North America grew by 8% and Asia Pacific grew by 8%.

The Group has continued the planned investment in its global strategy, notably the eCommerce with a human touch and One global offer initiatives where there has been further good progress in the quarter. eCommerce sales have grown by 5% and sales of our Famous For product categories, comprising our electronics and automation and control ranges, also grew by 5%.

Gross margin in the quarter was 0.8% points below the prior-year period. This reflects expected mix effects due to the stronger sales growth in North America and our Famous For product categories, and increased discounting in the UK and Asia Pacific.

We have taken action in the UK and have seen improving sales trends during the quarter. We are also taking action to improve the sales performance in France and the gross margin in Asia Pacific. Together, we expect that these initiatives will particularly benefit performance in the second half of the financial year.

Cash generation in the quarter has been strong and there have been no significant changes to the Group's financial position during the period.

Ian Mason, Group Chief Executive, commented:

"Group underlying sales growth in the first quarter was 3%, with combined sales growth across May and June of 4%. There has been further progress implementing our global strategy and performance in all markets was good with the exception of the UK and France.

We are taking action to improve the sales performance in the UK and France and the gross margin in Asia Pacific, and we will continue to invest in our global strategy in order to drive performance and deliver our medium-term growth ambitions."

Notes:

(1)  There was one less trading day in the first quarter as compared to the prior-year period. Full-year Group headline profit before tax is expected to be impacted by around £2m due to the impact of fewer trading days (H1 2015 impact: £1m).

(2)  Reported 2014 full year headline profit before tax of £101m would be £5m lower if translated at foreign exchange rates at the end of June 2014 (H1 2014 impact: £3m).

(3)  Sales growth rates, unless otherwise stated, are adjusted for trading days and foreign exchange movements ("underlying sales growth/decline").