Shares in the company, which also guided towards a flat full-year profit, fell as much as 5.6 percent. The stock was the top percentage loser on the FTSE-250 Midcap Index <.FTMC>.

Premier Farnell said gross margins for the quarter ended May 3 fell 1.2 percentage points from the previous quarter, adding to concerns as the company had reported lower margins last year as well.

The key negative remained the fall in gross margins and partly suggests a flat year-on-year EBITA of around 88 million pounds, a 4 million pounds downgrade on forecast, said RBC Capital Markets analyst David Greenall in a note.

Premier Farnell, which said in June last year that it would combine its marketing and distribution businesses to boost performance, sells roughly half a million products ranging from batteries to CCTV cameras.

The company said full-year adjusted operating profit would be in line with last year, but that profit for the first half would be marginally lower.

Premier Farnell posted a 4.2 percent fall in adjusted operating profit from continuing operations at 45.5 million pounds for the first half last year.

First-quarter like-for-like sales grew 5.4 percent, driven by a strong performance in single-board computers, especially following the launch of a new Raspberry Pi model.

Quarterly sales from Americas, which accounted for about 46 percent of the company's revenue in the last fiscal year, grew 2.2 percent.

Premier Farnell, which reports its results in pounds, said it continued to be impacted by adverse currency movements, particularly the euro.

"Gross margin is also hurt by foreign exchange in that they buy in one currency and then sell in another," Numis Securities analyst Steven Woolf told Reuters.

"More important for those areas that it's the same currency it bought at a different FX rate last year and are selling at a different FX rate so you get translational," he added.

During the quarter, the pound has gained 1.23 percent against the euro and 0.7 percent against the dollar , two of Premier Farnell's major currencies.

Premier Farnell shares were down 4.6 percent at 181 pence at 0903 GMT on the London Stock Exchange on Thursday.

(Editing by Gopakumar Warrier)

By Esha Vaish and Noor Zainab Hussain