Key Financials
Continuing operations
(unaudited)
£m except for per share 		H1 14/15
(26 weeks) 		H1 13/14
(26 weeks) 		Change Growth (a)
Total revenue 479.3 498.2 -3.8% 3.3%
Adjusted operating profit (b)
Adjusting items (b)
Total operating profit 		45.5
(2.4)
43.1 		47.5
0.2
47.7 		-4.2%
-
-9.6% 		3.1%
-
-2.5%
Adjusted profit before tax (b) 38.8 37.9 2.4% -
Total profit before taxation 36.4 38.1 -4.5% -
Adjusted earnings per share (b) 7.2p 7.1p 1.4% -
Basic earnings per share 6.8p 7.1p -4.2% -
Free cash flow (c) 13.8 8.3 66.3% -
Interim ordinary dividend per share 4.4p 4.4p - -

(a) Throughout this statement, in order to reflect underlying business performance, sales growth is based on sales per day for continuing businesses at constant exchange rates, and growth in operating profit is calculated at constant exchange rates, unless otherwise stated.

(b) Current year adjusting items comprise restructuring costs of £2.3m, and acquisition costs of £0.1m. In the prior year, adjusting items comprise restructuring costs of £1.3m and a net gain on US property disposal of £1.5m.

(c) Free cash flow comprises total cash generated from operations, excluding cash flows related to adjusting items, less net capital expenditure, interest, preference dividends and tax payments.

HIGHLIGHTS

  • First half sales growth of 3.3%, accelerating to 4.7% in the second quarter. Positive momentum reflects the execution of our strategic priorities and gradual improvement in the market backdrop.
  • Adjusted operating margin was 9.5%, in line with our expectations and unchanged from the prior year despite planned investments.
  • Adjusted profit before tax up 2.4% year on year, despite currency movements, benefiting from reduced finance costs.
  • Business reorganisation on track to achieve planned £6m-£8m annual cost benefits in 2015/16. New executive team in place to lead the simplified organisation as we seek to leverage our global resources.
  • Continued strategic progress, especially in developing leadership at the front end of electronics cycle:
    • Integration of AVID Technologies enhances Group's offering to components manufacturers.
    • Development kit sales to engineering customers up 13.5%.
    • Phase one of element14 Design Center launched. Phase two will provide industry's first online software store.
    • Global contract signed with ARM to support mbed online tools platform for development of the Internet of Things.
    • Emerging markets sales growth up 14.4%, ahead of target.
  • Free cash flow at 2.9% of sales following inventory investments; inventory expected to remain at similar level in second half.
  • The Board has approved an unchanged interim dividend of 4.4p per share (2013/14: 4.4p).

Laurence Bain, Chief Executive Officer, commented:

"The Group made progress in the first half of 2015 towards achieving its sales growth target of 6%, whilst maintaining stable gross margin. We are on track with our planned investments to develop our design services business and to further enhance our innovative eCommerce channels and, in June, we commenced the reorganisation of our business into a more efficient, global enterprise. The successful execution of these initiatives will position the Group to become the global destination for electronics customers and deliver its strategy for profitable growth.

We continue to expect a year of further progress in achieving the Group's strategic goals with our full year expectations remaining unchanged. Following the completion of the planned strategic investments over the remainder of this year, we believe that the Group will be well positioned to accelerate its top-line growth and deliver profitability in line with our target."

For further information, contact:

Premier Farnell plc
Laurence Bain, Chief Executive Officer
Mark Whiteling, Chief Financial Officer
Thomas Churchill, Investor Relations
+44 (0) 20 7851 4107

FTI Consulting
Richard Mountain
+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.

An interim management statement will be announced on 14 November 2014.

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